EFFECT OF PUBLIC DEBT ON POVERTY IN NIGERIA (1990-2022)

The challenge of poverty has continued to be connected to government unfavorable policies on economic indicators. One of the policies was the desire of the government to continue to pile up debt without extending such borrowing to reduce poverty rate in Nigeria. This study examined the effect of public debt on poverty rate in Nigeria from the period 1990-2022. Specifically, the study examined the trends of public debt and poverty rate, analyzed the relationship between public debt and poverty rate, established the determinants of poverty, evaluated the short-run and long-run relationship between public debt and poverty and examined the causal relationship between public debt and poverty rate in Nigeria. To investigate the objectives an ex-post facto research design was used to gather time series data for the study from various government and economic indicators found to be reliable. The descriptive statistics and econometric technique of the ARDL model were used to analyze the data collected for the study. More so, in order to be able to use the ARDL model the Bound test was conducted and reviewed that there was an existence of a long-run relationship between public debt and poverty. The result of the ARDL revealed that public debt had increase poverty rate in Nigeria. It was discovered that there was a significant long-relationship between public debt and poverty in Nigeria. It was discovered that public debt, inflation, exchange rate, investment, unemployment, per capita income, infrastructure and debt servicing were determinants of poverty rate. The finding of the study further indicated that there was a uni-directional relationship between public debt and poverty in Nigeria. The study concluded that public debt aggravated the challenge of poverty in Nigeria. The study recommended that there was a need for the government to reduce the amount of public debt through adequate economic policy that enhanced government total revenues without the need for public debt in order to reduce poverty rate in Nigeria.