TY  - JOUR
T1  - Sustainability of Domestic Debt in Nigeria: An ARDL Bounds Testing Cointegration Approach
AU - Ayuba, K. Ibrahim AU - Ibrahim, B.T. Fatimah Wati AU - Mohd. Khan, Shazida Jan Bt. 
JO  - International Business Management
VL  - 10
IS  - 15
SP  - 2823
EP  - 2830
PY  - 2016
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2016.2823.2830
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2016.2823.2830
KW  - ARDL bounds testing
KW  -domestic debt
KW  -financing government budget
KW  -sustainability
KW  -oil revenue and non-oil revenue
AB  - This study assesses the domestic debt sustainability due to the fluctuation in revenue of most African States, principally when it relates with the effects of the financially crisis and global economic turm oil that emanates from western countries. The situation has become a vexed issue particularly for policy makers from mineral (oil) resource nations. However, oil sector remains the major revenue in Nigeria and the largest economy in the continent. Therefore, the linkage with the shortage in revenue gap from traditional sources to fund government budgets in recent time makes it crucial yet disturbing. For this reason, it becomes inevitable to usher fiscal policy reforms in Debt Management Office (DMO), pension’s funds, bounds market and geared to deepen the financial system to aid and sustain growth and development. Accordingly, this policy has led to an upsurge in domestic debt/borrowing over external debt/borrowings. Consequently, the policy has raised several concerns and has become more worrisome regarding sustainability of the debt. More specifically, this study aims to assess whether this policy path is sustainable or not. In order to achieve this objective, the researchers adopt the celebrated Hamilton and Flavin Inter temporal Budget Constraint (IBC) framework approach using ARDL bounds testing cointegration technique with annual data set for the period 1981-2013 fiscal years. It can be found from the data analysis that the government domestic debt do not show any cointegration in the long run signifying that government domestic debt do not comply with the IBC rule. Hence forth, policy makers should implement strict compliance to obey the IBC. Furthermore, government should ensure a sustainable and innovative debt management system and pursue alternatives to oil revenue management by diversifying the revenue base due to unsustainability of the stance. Since consolidation may not be an option due to the dangerous level of welfare and development.
ER  -