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ABSTRACT
The study investigate the impact of public debt as disaggregated into its various components on stock market development in Nigeria for the period 1985 to 2022 employing annual secondary time series data. The study used the longitudinal research design and the Nigerian Exchange Limited (NXE) Total Market Capitalization was the dependent variables, with external debt, domestic debt and debt servicing classified as the independent variables while inflation rates was included as control variable. The Ordinary Least Squares (OLS) technique was used to assess the relationship between public debts and stock market development, descriptive statistics and correlation analysis were used to ascertain the background characteristics of the data set while the data were estimated with the aid of Eviews 9.0 econometric statistical package. The empirical findings reveal that domestic debt exerts significant positive impact on stock market development while external debt, debt servicing and inflation rate have no significant impact on stock market development in Nigeria. Based on the findings, the study recommends among others; the continued need for the government to utilize domestic debt instruments within the approved limits and to employ the funds in long term productive economic activities that positively influence the stock market.
