The study examined the implication of deficit financing on Economic recovery in Nigeria. The study used secondary data from CBN statistical bulletin on various issues as relevant for the period under study (1981-2019). Augmented Dickey Fuller (ADF) unit root test, Johanson Co-integration test and normality test were employed for the analysis. The research findings revealed that deficit financing through External debt borrowing has a significant positive effect on economic recovery in Nigeria. Also Domestic debt has a positive significant effect on economic recovery in Nigeria. The study therefore, recommends that Government should set up monitoring teams that will make sure that the budget is well and carefully implemented and as well as loan borrowed in other to reduce corruption, linkages and wastages, the team will do this by holding everyone accountable for every government money spent. We recommended that government should strive to diversify its revenue base and also demonstrate a high level of transparency in both its monetary and fiscal operations among others. Government should maintain optimum level of external debt as it is one of the mechanisms for economic growth but to an optimum level and that all external debts hould be effectively utilized for the purpose for which it was obtained so as to promote economic growth.