Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

Issue 1, March 2022

Description

FISCAL POLICY AND ECONOMIC GROWTH IN NIGERIA

Authors

Babatope Ayodeji ADEYEMI and Adefisayo AWOGBADE

Abstract

The study examined the effect of fiscal policy on economic growth in Nigeria from 1986 to 2020. Some econometric tools were employed to explore the relationship between these variables. Fiscal policy was a proxy by total public expenditure, external debt, external reserve, and tax revenue while economic growth was a proxy with Real GDP. The study examines stochastic characteristics of each time series by testing their unit root using Augmented Dickey Fuller (ADF) test. A bound test was employed for the Co-integration(s) was done to exact the long run relationship among the variables of interest. Also, the Autoregressive Distributed Lag Model (ADL) was used to provide complementary information on the dynamic behaviour of the variables in the system and the lost information of the adjusted period to equilibrium. Then, the effect of fiscal policy on economic growth was ascertained using the long run coefficient of Autoregressive Distributed Lag Model. The findings of the analysis show that while Tax revenue, External Debts stock, and External Reserves exact an inverse effect on economic growth, Public Expenditure exact a positive and significant effect on economic growth in Nigeria. The T-statistics show that only external reserve is not statistically significant to explain the economic growth in Nigeria as the P-value of 0.0913 is more than 0.05. The study concluded that fiscal policy has a significant effect on economic growth in Nigeria. The study recommended that government should endeavour to reduce their borrowing from international institutions or bodies by looking inward for other means of financing the government expenditure, this will reduce the proportion of revenue set aside for debt servicing. More so, the government should allocate effectively resources for development such as education, health, and infrastructural sectors of the economy.

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