TREASURY BILLS AND ECONOMIC GROWTH IN NIGERIA

Abstract

This paper investigated the impact of treasury bills on economic growth in Nigeria from 1991 to 2023 with data on the variables - Gross Domestic Product, Treasury Bills Rates, Money Supply, Credit to private sector, Inflation Rate were collected  from Central Bank of Nigeria statistical bulletin (various issues). The Ordinary Least Squares technique was employed to capture the long-run relationship between the variables, while the Granger Causality test was used to determine the causal effect of the variables. The results of the study revealed a significant negative correlation between treasury bills and economic growth. This suggests that the issuance of treasury bills has a detrimental effect on Nigeria's economic growth. Furthermore, the study found that all the variables examined had a substantial impact on the economy, highlighting the complex interplay between economic growth, treasury bills, inflation, and private sector credit. Furthermore, the study found that all the variables examined had a substantial impact on the economy, highlighting the complex interplay between economic growth, treasury bills, inflation, and private sector credit. Despite the negative correlation between treasury bills and economic growth, the study suggests that treasury bills can actually be a useful tool for boosting economic growth if designed and implemented effectively. The paper recommends that the government should ensure that treasury bills are used to support productive activities and stimulate investment in key sectors of the economy. This could involve using treasury bills to finance infrastructure projects, support small and medium-sized enterprises, or promote export-oriented industries and not just to mop up funds to control inflation among others.