A Publication of the Department of Economics
Rivers State University, Port Harcourt.
Economic Desk Journals is an institutional based platform for academics and professionals to share the latest developments in empirical research with practical applications and analysis of theoretical andmethodological developments in the field of Economics and allied Discipline. Economic Desk Journals is a peer-reviewed open access journal. >>>
| Title: | Impact of Fiscal Policy on Macroeconomic Performance in Nigeria (1990-2022) |
| Author(s): | NWIKINA C.G., AMADI S. N. & OJIEZELE C. E |
| Abstract: | The study explored the influence of fiscal policy on Nigeria's macroeconomic performance from 1990 to 2022, drawing data primarily from the Central Bank of Nigeria (CBN) and the World Bank‘s World Development Indicators (WDI). Key fiscal policy indicators, including public capital expenditure, public recurrent expenditure, tax revenue, and non-tax revenue, were analyzed alongside macroeconomic performance proxies— namely, the inflation rate and unemployment. To ensure the reliability of the data, the Augmented Dickey-Fuller (ADF) Unit Root test was applied, revealing a mixed order of integration among the variables. Consequently, the Auto-Regressive Distributed Lag (ARDL) bounds testing approach was used to examine the long-run relationships. The ARDL bounds test results confirmed a long-run correlation between fiscal policy and macroeconomic performance. Specifically, the first model showed that public capital expenditure and tax revenue had a significant negative impact on inflation, while public recurrent expenditure and non-tax revenue had a significant positive relationship with inflation. In the second model, public capital expenditure and non-tax revenue significantly decreased unemployment, whereas public recurrent spending had a positive and significant impact on unemployment whereas tax revenue had a negative and insignificant impact on unemployment. The study concluded that fiscal policy is critical in shaping Nigeria‘s macroeconomic performance. It is recommended that the Federal Ministry of Finance and National Planning prioritize capital allocations in the national budget, particularly in high-productivity sectors such as infrastructure, agriculture, and technology. This strategic focus could alleviate inflationary pressures while fostering sustainable economic growth over the long term. |
| Keywords: | |
| Journal: | Journal of World Economics and Financial Report Vol 1 No 1 |
Copyright © 2021 - All Rights Reserved - Economic Desk Journals
Powered by 