International Research and Academic scholar society

IMPACT OF GOVERNMENT BONDS ON ECONOMIC GROWTH IN NIGERIA


Sr No:
Page No: 44-57
Language: English
Authors: Dr. Osekweyi J Odonye*1, Dr. El-Yaqub Ahmad B.1, Mr. Christopher Kaduna Bulus3
Affiliation: 1*-3Department of Economics, Faculty of Social Sciences Nasarawa State University, Keffi Nigeria, 1Department of Economics, University of Abuja
Received: 2026-08-05
Accepted: 2026-09-06
Published Date: 2026-09-19
Abstract:
This study examined the impact of Government bond on economic growth in Nigeria for the period between 1999 and 2024. An ex-post-facto research design was adopted and the study was based on the theoretical framework of the Keynesian theory of public finance. Time series data on values of amount of government bonds issued (GBA), Number of government bond issues (GBN), average government bonds issued maturity period (GBM) and average government bonds yield (GBY) as independent variables and Gross Domestic Product Growth Rate (GDPr) as dependent variable were collected from publications of CBN, NBS and World Banks. The data collected were subjected to both pre-estimation and post estimation tests for variables trend characteristics, descriptive statistics, unit root, co-integration, causality, serial correlation and normality. Secondly, a VECM technique of estimation was employed to determine the variable coefficients and T-statistic test of hypotheses was employed to determine their significance. Generally, the study found a significant relationship between the government bond variables and Nigeria’s economic growth. On the individual variables findings, while amount of government bonds issued (GBA), Number of government bond issues (GBN) and Average bonds issued maturity period (GBM) have positive and significant impact, average government bonds yield (GBY) has negative but insignificant impact on economic growth during the period under review in Nigeria. While a unit change is GBA, GBN and GBM increases GDPr by 1%, 4.32% and 39.05% respectively, a unit increase in GBY decreases GDPr by 22.57%. The study recommended in addition to others that the Nigerian government should diversify and deepen its bond market by introducing various bond types and extending maturity profiles. This can attract a broader investor base, reduce borrowing costs, and ensure that the government can finance infrastructure projects more effectively over the long term, ultimately fostering more stable economic growth.
Keywords: Government Bonds, Economic Growth, VECM, Nigeria, Keynesian Public Finance.

Journal: IRASS Journal of Economics and Business Management
ISSN(Online): 3049-1320
Publisher: IRASS Publisher
Frequency: Monthly
Language: English

IMPACT OF GOVERNMENT BONDS ON ECONOMIC GROWTH IN NIGERIA