Macroeconomic Determinants of Household Debt in Nigeria: A Time-Series Analysis, 1986–2025

This study examines the macroeconomic determinants of household debt in Nigeria over the period 1986–2025, employing the Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration. Using annual time-series data, the paper investigates how GDP per capita, income per capita, interest rates, inflation, unemployment, house prices, domestic credit to the private sector, bank branch density, fintech penetration, age dependency ratio, urbanization, education levels, financial literacy, legal rights strength, and social safety nets influence household indebtedness, while controlling for fixed capital formation, foreign direct investment, infrastructure index, exchange rate volatility, trade openness, technology, government expenditure, institutional quality, corruption control, political stability, ease of doing business, sectoral composition, natural resource rents, financial development, labour force participation, R&D expenditure, and internet penetration. The findings reveal that GDP per capita, domestic credit to the private sector, fintech penetration, and urbanization have statistically significant positive effects on household debt, whereas inflation, interest rates, and unemployment have significant negative effects. The error correction model indicates a speed of adjustment of −0.42, suggesting that approximately 42% of disequilibrium in household debt is corrected annually. The study contributes to the literature by integrating digital financial inclusion metrics within a comprehensive macroeconomic framework for a major African economy, offering policy-relevant insights for sustainable household debt management in developing economies.