Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Impact of Fiscal Policy on the Growth of Nigerian Economy

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

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 PolicyGovernment ExpenditureTaxationEconomic Growth and GDP

References

Abdurrauf, I. B. (2015). Fiscal Policy and Economic Development in Nigeria. Journal of Economics and Sustainable Development. www.iiste.org ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online) Vol. 6, No.7, 2015. Adefeso, H. A., & Mobalaji, H. I. (2010). The fiscal-monetary policy and economic growth in Nigeria: Further empirical evidence Pakistan. Journal of Social Sciences, 7(2), 137- 142. Agu, S. U., Okwo, I. M., Ugwunta, O.D. & Idike, A. (2015). Fiscal Policy and Economic Growth in Nigeria: Emphasis on Various Components of Public Expenditure. DOI: 10.1177/2158244015610171. https://us.sagepub.com/en-us/nam/open-access-at-sage Alexiou, C. (2009). Government Spending and Economic Growth: Econometric Evidence from South Eastern Europe. Journal of Economic and Social Research, Vol.11, No.1 Amanja, D. and Morrissey, O. (2005). Fiscal Policy and Economic Growth in Kenya.Centre For Research in Economic Development and International Trade, University of Nortingham. www.nortingham.ac.uk/economics/research/credit accessed 29/6/’10 Babalola, S.J. and Aminu, U. (2011). Fiscal Policy and Economic Growth Relationship in Nigeria.International Journal of Business and Social Science Vol. 2 No. 17 www.ijbssnet.com Chuku, A. C. (2010). Monetary and fiscal policy interactions in Nigeria: An application of a state-space model with Markov switching. Journal of Applied Statistics, 1, 39-51. Cornelius, M., Ogar, A., & Oka, F. (2016). The impact of tax revenue on economic growth: evidence from Nigerian. Journal of economics and finance, 7(1), 32-38. Cornwall, J. L. (2019). Economic growth. Dalhousie University, Halifax, Nova Scotia. https://www.britannica.com/topic/economic-growth. Dandan , M. M. (2011). Government Expenditure and Economic Growth in Jordan, IPEDR, vol. 4, pp. 467- 471. Dauda, R. O. (2010). Investment in Education and Economic Growth in Nigeria: An Empirical Evidence. International Research Journal of Finance and Economics, 55:158-169. Enache, C. (2009). Fiscal Policy and Economic Growth in Romania.AnnalesUniversitatis Apulensis Series Oeconomica, 11(1): 502-12. Gbosi, A.N. (2001). Contemporary Macroeconomic Problems and Stabilization Policies in Nigeria, Antovic Ventures, Port Harcourt. Ikeora, M.J. (2007). Monetary theory and policy in a developing economy. Cape Publisher International Ltd, Wuse phase 2 Abuja. Jeffrey, M. S. (2019). Fiscal Policy: Economic Effects. Congressional Research Service https://crsreports.congress.gov R45723jk. Margareta, D. and Asa, H. (2012) Taxation of income and economic growth: An empirical analysis of 25 rich OECD countries. Journal of economic development, 21(1): 93-118. Michael, J. B. (2020). Economic growth, its measurements, causes, and effects. https://www.the balance.com/what-is-economic-growth-3306014 Muritala, T. and Taiwo, A. (2011). Government Expenditure and Economic Development: Empirical Evidence from Nigeria?, European Journal of Business and Management, vol. 3, no.9, pp. 18-28. Obiora, F. C. & Nkechukwu, G. C. (2018). Taxation and economic growth in Nigeria.3rd International Conference on Building A Globally Competitive Economy in the Post Recession Era in Nigeria. Ogbole, F. O., Amadi, S. N., & Essi, I. D. (2011). Fiscal policy: Its impact on economic growth in Nigeria (1970-2006). Journal ofEconomics and International Finance, 3, 407-417. Olawunmi, O., & Ayinla, T. A. (2007). Fiscal policy and Nigerian economic growth.Journal of Research in NationalDevelopment, 5(2), 19-29. Omitogun, O., & Ayinla, T. A. (2007). Fiscal policy and Nigeria economic retirement. Available from www.termpaperwarehouse.Com Omodero, C.O., Ihendinihi, J.U., Ekwe, M.C. & Azubuike, J.U. (2016). The impact of fiscal policy on the economy of Nigeria (1994 and 2014).Published by European Centre for Research Training and Development UK (www.eajournals.org) 84 ISSN 2054-6319 (Print), ISSN 2054-6327(online) Onwu, O.P. (2014). Impacts of fiscal policy components on economic growth in Nigeria: an empirical trend analysis. Kuwait Chapter of Arabian Journal of Business and Management Review Vol. 4, No.1; September. 2014 Osuala, A.E. (2010). "Empirical Analysis of the Impact of Fiscal Policy on Economic Growth of Nigeria" International Journal of Economics and Finance; ( 6),6. Potters, C. (2021). Economic Growth; Microeconomics. https://www.investopedia.com/term/e/economic growth.asp. Reem, H. (2009). What is fiscal policy.Bonds International Monetary Fund. Available from www.imf.org Schmidt, M. (2018). A Look at Fiscal and Monetary Policy. http://www.investopedia.com/contributors/265/ Sharma, B. (2012). Government Expenditure and Economic Growth in Nepal: A Minute Analysis?, Basic Research Journal of Business Management and Accounts, vol. 1, no.4, pp.37-40, Stein, H. (1968). Fiscal Policy in David L.Sills (ed). International Encyclopedia of Social Science Vol. 5. New York. MacmillianPg 460) Sylvia, U. A., Ifeoma, M. O.,Okelue, D. U., & Adeline, I. (2015). Fiscal Policy and Economic Growth in Nigeria: Emphasis on Various Components of Public Expenditure. Creative Commons CC-BY; DOI: 10.1177/2158244015610171 https://us.sagepub.com/en us/nam/open-access-at-sage Weil, D. N. ( 2019). Fiscal Policy.Congressional Budget Office: http://www.cbo.gov/ Yasin, M. (2003). Public Spending and Economic Growth: Empirical Investigation of Sub- Saharan Africa. Southern Economic Review.www.ser/cu.edu.

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT

Cashflow Management and the Performance of Commercial Banks in Nigeria

Author: Jeffrey Ayas Iyakonbogha, Clement E. Ozele

The Nigerian Code of Corporate Governance and Financial Performance of Deposit Money Banks in Nigeria

Author: i, Eneaniofu Daniel Mmaduakonam, ii, Azolike Nkiru Nkechi, iii, Emeter Patrick Okechukwu, iv, Okwor Emmanuel Ejimnkonye