IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 7 NO. 2 2021

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Impact of Fiscal Policy on the Growth of Nigerian Economy

Olisaji Chinonso Joel & Ven. Dr. Onuora, J. K. J.

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Abstract

The study empirically examined the impact of fiscal policy on Nigerian economic growth between 2015 and 2019. The study used Secondary data collected from the statistical bulletin of the Central Bank of Nigeria (CBN) 2020. The study also employed ex-post facto research design and regression model to analyze the data collected. In the model, Government Expenditure and Government revenue through Companies Income Tax (CIT) were regressed against dependent variable Economic Growth proxied by GDP growth. The result revealed, that there is a significant and positive relationship between Companies Income Tax (CIT) and Economic Growth (EG) measured using Gross Domestic Product (GDP) with a p-value of 0.030 which is less than the 5% level of significance adopted. On the same note, the study found an insignificant and negative relationship between Government Expenditure (GE) and Economic Growth (GDP) with a p-value of 0.334 which is greater than the 5% significant level adopted. The study therefore recommends that: government should formulate and implement workable fiscal policy options that will enhance economic growth. This is possible if government pursues a fiscal policy measure that will enhance full employment national income. Again, Government should ensure that revenue generation through taxation and capital and recurrent expenditure of the nation are properly managed to ensure an increased productive capacity and to accelerate economic growth of the nation.

keywords:

Fiscal Policy, Government Expenditure, Taxation, Economic Growth and GDP

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