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Abstract
This study evaluates the transmission mechanism from investment-savings gap to public debt sustainability through revenue channel in Nigeria using annual data from 1970 to 2021. The theoretical foundation of the paper is rooted in the two gap model. The procedure involves impulse response functions and variance decomposition analyses which have been used to summarise/interpret the Structural Vector Autoregressive model used for estimation. Empirical evidence suggests that negative shocks to investment-savings gap will cause an increase in revenue which will in turn impact public debt sustainability negatively. The researchers conclude that the positive effect of investment-savings gap on revenue is not communicated to public debt sustainability. The recommendations include blocking of revenue leakages through elimination of corruption. Secondly, implementation of an appropriate mix of tax and income policies should be pursued to generate more savings for investment and hence more revenue to address the debt problem.