However, the results found bidirectional relationship between financial development and economic growth in. In view of the appreciable growth the nigerian stock market has undergone over the years, which prompted its listing by the international finance corporation 1991 as one of the emerging markets in the world, and its resultant positive impact on economic growth in nigeria, as shown by the foregoing empirical analysis, the study concludes with. Economic and fiscal implications of nigerias rebased gdp. For example, there is no specific or identifiable economic growth or development in nigeria and this questions the possibility of the policy ever bringing the countrys economy to its optimum and desired level. The research material available to the researcher is insufficient, thereby limiting the study. The effect of fiscal policy on economic growth in nigeria. Econometric analysis of the impact of fiscal policy variables on nigeria s economic growth 1970 2009 peter n. It, therefore, becomes necessary to highlight the monetary policy in nigeria. One of the most important objectives of macroeconomic policy in recent years has been the rapid economic growth of an economy. D school of management sciences national open university of nigeria abstract the role of fiscal policies in the development of emerging economies has been a major source of concern in economic literature. However and in contrast to the above, sekou 2015 in his study utilised ordinary least square method to estimate. However, the results found bidirectional relationship between financial development and economic growth in kenya, chad, south africa, sierra leone and swaziland.
Fiscal policy, public debt and monetary policy in emes. Peter and simeon 2011 investigated the impact of fiscal policy variables on economic growth in nigeria. From the empirical result findings, it was discovered that there is a significant relationship between fdi andor economic growth in nigeria. Public finances, fiscal policy, public spending, fiscal governance. Mar 14, 2017 monetary policy are monetary management techniques put in place by the government through the central bank to control money stock that is supply of money in order to influence broad macro economic objectives which include price stability, high level of employment, sustainable economic growth and a balance of payment equilibrium. This study investigated the effect of fiscal policy on economic growth in nigeria. The paper suggest that for any meaningful progress towards fiscal prudence on the part of government to occur, some powerful prostability stakeholders strong enough to challenge government fiscal recklessness will need to emerge. The study developed and specified a multiple regression model to establish the relationship between the dependent variable and the independent variables. Dynamic effects of fiscal policy on output and unemployment. Fiscalmonetary policy and economic growth in nigeria. The nigerian economy grew rapidly, in gross domestic product terms, at an average rate of 8% a year.
Pdf on jan 1, 2012, martins iyoboyi and others published fiscalmonetary policy mix and economic growth responses in nigeria find. It was found out from the study of 73 countries over. The goal of the nigerian fiscal policy is best achieved via stable instruments, like government expenditure and interest rate. The study made use of expost facto research design. This study uses secondary data which were obtained from the statistical bulletin of the central bank of nigeria cbn covering the period from 1985 to 2015. This investigates the three elements of fiscal policy 1 government spending, taxation and the other source of revenue which finance public spending and the resulting budget deficit or surplus which occurs wherever government expenditure does not exactly equal revenue. Fiscal policy is still widely recognized as a potent tool for enhancing growth, redistributing income and reducing poverty though the nigeria experience is tending to suggest otherwise. Being economy has long history of its economic problems irrespective of developing economy regardless of the nature of economic practices. The impact of fiscal policy on economic growth the keep. Using the solow growth model estimated with the use of ordinary least square method, it was found that fiscal policy has not been effective in the area of promoting sustainable economic growth in nigeria. The impact of foreign direct investment fdi on the growth. Keywords macroeconomic policy, economic growth sustainability, nigeria 1. How can fiscal policy support sustained longrun economic growth, while at. This study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods.
The imf, therefore, advised the federal government to pursue a policy. Economic and fiscal implications of nigerias rebased gdp gross domestic product gdp is an internationally recognised measure of economy size and strength. Time series data was used and sourced from the cbn statistical bulletin and annual reports. Financial system restructuring, financial development and. The study investigates the impact of fiscal policy on economic growth in nigeria for the period 19852018. Fiscal policy sustainability and economic growth in nigeria iiard. Foreign capital, domestic policy, and economic growth. It is importance to have uptodate data so the rebasing is a step in the right direction. This is contrary to persuasive monetary policy advice for inflation targeting pursued by central banks and the international monetary fund imf. They findthat the impact of foreign aid on both economic growth and economic development is positive. May 22, 2017 the scope of the study covers fiscal policy and economic growth in nigeria from 19802012. Omojimite and iboma 2012 on their paper focused on fiscal deficit and the productivity of the nigeria tax system, 19702010. Such problems include high unemployment rate, low investment, high rate of inflation and unstable foreign exchange rate.
In a similar study, adeoye, 2011 gave analyses of the impact of fiscal policy on economic growth in nigeria for the period of 19702002 where he made use of ordinary least square ols. The impact of monetary policy on the economic growth of nigeria. Ogbole, amadi, and essi 2011 wrote on fiscal policy and its impact on economic growth in nigeria 19702006. The paper concluded that fiscal and monetary are still complementary. Nenbee department of economics, faculty of social sciences university of port harcourt, port harcourt, nigeria email. Introduction during the 1980s and 1990s, the vulnerability of emes to shocks was often exacerbated by high fiscal deficits, underdeveloped domestic bond markets, and largecurrency and maturity mismatches. Fiscal policy and economic growth in nigeria, 1970 2011 udokang, a. Fiscal policy, income inequality and inclusive growth in developing. Fiscal policy, public debt and monetary policy in emerging. Introduction background monetary policy as a technique of economic management to bring about sustainable economic growth and development has been the pursuit of nations while formal articulation of how money affects economic. Government spending and economic growth in nigeria. Payment of royalty is now to be on the same basis as taxes there is an increased drive to make royalty a major source of government take in the oil and gas. May 03, 2016 the research was adopted to examine the effect of fiscal policy on economic growth in nigeria. The rest of the paper is divided into four sections.
Fiscal policy and economic growth in nigeria semantic scholar. Although, the finding seems invalidating the keynesian. Pdf analysis of tax formation and impact on economic growth in. Pdf fiscalmonetary policy mix and economic growth responses. Monetary policy, inflation, economic growth, central bank of nigeria, nigeria. The impact of fiscal and monetary policy on nigerian. In the medium and long term, fiscal policy also plays a significant role in the economy. The impact of fiscal deficits on economic growth in nigeria. The international monetary fund imf, yesterday, said nigeria is expected to emerge from recession this year with an economic growth of 0.
This article aims at determining the impact of various components of fiscal policy on the nigerian economy. The paper examines fiscal policy regulations as a tool for enhancing economic growth and poverty reduction in nigeria using data covering the period 19812014 obtained from central bank of nigeria. The paper tested different diagnostic tests of nigerias time series data. Fiscal policy and economic growth in nigeria, 1970 2011. Economic growth has long been considered an important goal of economic policy with a. Fiscal deficits have significant impact on economic growth in nigeria. The main objective of the study is to ascertain the effect of fiscal policy measures on growth of the nigerian economy. Data were collected from the central bank of nigeria cbn statistical bulletins. In nigeria some authors had examined the performance of foreign trade and economic growth. Also, most of the typically scanty empirical attempts have been, in the main, conducted at the crosscountry levels, thus, making it quite difficult to extrapolating to countryspecific cases. This question is of significant policy relevance, as nigeria recently launched a financial inclusion programme as a strategy for wealth creation and poverty.
In the cause of the study, there are some factors which limited the scope of the study. Implications of fiscal policy measures o n growth of the. Stock market development and economic growth in nigeria. Generally, this study will dwell on the overview of monetary policy situations in the nigerian economy. Effect of nigeria expansionary monetary policy on investment growth proceedings of 33rd ththe iier international conference, berlin, germany, 26 august 2015, isbn. Monetary policy are monetary management techniques put in place by the government through the central bank to control money stock that is supply of money in order to influence broad macroeconomic objectives which include price stability, high level of employment, sustainable economic growth and a balance of payment equilibrium. An appraisal of fiscal policy measures and its implication. Introduction monetary policy can be described a deliberate effort by the monetary authority to control the money supply and the.
We simply used descriptive statistics to show contribution of government fiscal policy to economic growth, and to ascertain and explain growth rates, and an ordinary least square ols in a multiple form to ascertain the relationship between economic growth and government expenditure. Fiscal policy and nigerian economic growth journal of. Impact of monetary policy of economic growth in nigeria. Inclusive financial arrangement is becoming a policy issue in both developed and developing nations of the world as it has been perceived as a veritable tool for poverty alleviation and economic development. An expost facto investigation seeks to reveal possible relationships by observing an existing condition or state of affairs and searching back in time for plausible contributing factors. Ogbole, amadi and essi 2011 wrote on fiscal policy. In order to combine the selection of the model and the estimation, the. Fiscal deficits have no significant impact on economic growth in nigeria. This paper examines the effects of financial inclusion on the economic growth of nigeria 19822012. Department of accountancy akwa ibom state polytechnic, ikot osurua, ikot ekpene, nigeria email.
These perceived problems are being claimed to have caused a fast decline in the economic growth of nigeria. Umoh introduction this article overviews the growth and development of the nigerian economy from inde pendence to present times. Economic growth here refers to annual increase in productivity which is often measured by gross domestic product gdp. Using data covering the period between 1970 and 2009 and the vector. The stationarity of the variables were tested using. Implications of nigerias draft petroleum fiscal policy. An overview of the nigerian economic growth and development. An econometric investigation abubakar risk of overheating.
The positive impact of these policy tools on economic performance will help the country. The study was undertaken to ascertain impact of fiscal policies in nigeria economy. It was expected that an increase in government expenditure ceteris paribus will increase investment and hence. Economic growth is defined as the process whereby the real per capita income of a. Econometric analysis of the impact of fiscal policy variables on nigerias economic growth 1970 2009 peter n. Ii, issue 4 july 20 appropriate policies, the relationship between government spending and economic growth can be maintained in the positive direction. The scope of the study covers fiscal policy and economic growth in nigeria from 19802012. This study investigated the impact of fiscal and monetary policy on nigerian economic growth from 1981 to 2015, with the interest in exploring which of fiscal or monetary policy has been effective in propelling economic growth in nigeria and how gdp growth responds to the monetary and fiscal policy shock. The result confirmed the existence of the debt laffer curve and the nonlinear effects of external debt on economic growth in nigeria.
Fiscal policy, stabilization, and growth publications inter. Econometric analysis of time series data from central bank of nigeria was conducted. Nigeria has over the years been controlling her economy through various. Pdf as a fiscal instrument, direct taxes are used to adjust peoples disposable income and to reduce the. The impact of foreign direct investment fdi on the. We shall now evaluate some of the various economic growth theories and see how fiscal policy has played a key role in these growth theories. An empirical trend analysis onyemaechi joseph onwe, ph. This follows from studies that combine the economic with the functional. The study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods. The impact of fiscal policy on the nigeria economy economics. This project seeks to evaluate the effectiveness of the cbns monetary policy by assessing the extent to which the monetary policies have impacted on the growth process of nigeria using the major objectives of monetary policy as yardstick.
Saibu 2015 adopted the model developed by scully 2003 for cote divoire. For instance, oyejide 1974, using nigeria, as a laboratory test ground that an increase in export proceeds could lead to an expansion. The entire tests rejected the null hypothesis and accepted the alternative hypothesis. Therefore, in line with the above objectives the following hypotheses are presented. This paper examines the causal relationship between globalization and economic growth in nigeria from 1981 to 2012. Sahoo and sethi 20 examined the impact of foreign aid on economic growth and development in india for the period 197576 to 2009 10, using ordinary least squares.
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