IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 8 NO. 4 2024
DOI: 10.56201/wjfir.v8.no4.2024.pg117.132

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Fiscal Policy Variables and Economic Growth in Nigeria

Ele, Linus Egwu, Mgbada, Friday Nwome and Nwafor, Ifeanyi Nwankwo

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Abstract

This study focused on the effect of fiscal policy variables on economic growth in Nigeria, secondary data was used to draw out information. The specific objectives were to: determine the impact of government expenditure on economic growth in Nigeria; and assess the impact of government tax revenue generation on economic growth in Nigeria. The ordinary least squares (OLS) method was employed to estimate the parameters in the analysis. The findings indicate that: government expenditure has a positive and significant impact on Nigeria’s gross domestic product; government tax drive has a negative and significant impact on Nigeria’s gross domestic product. Based on the findings, the study recommends as follows: government should reduce its spending when tax rate are high, this will balance effect and normalize growth; government should review the tax rates downward because it is hitting hard on the aggregate economic output.

keywords:

Fiscal Policy, Economic Growth, Macroeconomics, Revenue Generation, Tax Rate

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