Published October 11, 2022 | Version v1
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IMPACT OF FISCAL POLICY ON ECONOMIC GROWTH IN NIGERIA

Authors/Creators

  • 1. Department of Economics, Ritman University, Ikot Ekpene Akwa Ibom State, Nigeria
  • 2. Department of Management, Ritman University, Ikot Ekpene Akwa Ibom State, Nigeria

Description

This study examines the Impact of Fiscal Policy on Economic Growth in Nigeria from 1980 to 2019. The specific objectives were to; test the causal relationship between fiscal policy and economic growth in Nigeria; empirically examine the impact of tax revenue on economic growth in Nigeria; empirically evaluate the impact of government recurrent expenditure on economic growth in Nigeria and to empirically investigate the impact of government capital expenditure on economic growth in Nigeria. Drawing extensively from the literature, two theories were used, namely; The Endogenous Growth Theory and The Keynesian Theory of Economic Growth. Time series data were used in the Study and Classical Ordinary Least Square (OLS) was the technique employed. The major findings from the study are outlined as follows: The estimated granger causality test shows evidence of no causality or independence between fiscal policy and economic growth in Nigeria; Tax revenue recorded a negative though statistically insignificant relationship with economic growth in Nigeria; Government recurrent expenditure showed a positive but statistically insignificant relationship with economic growth in Nigeria. Government capital expenditure disclosed an insignificant negative relationship with economic growth in Nigeria. Based on the findings, the study recommended among others that government should close all loopholes (leakages) in tax collection to ensure that tax proceeds are remitted in full to respective tax authorities, government should make concerted effort to channel tax proceeds to development oriented projects so that both short and long term gains would be realized.

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