Examine the impact of company income tax on the performance of the nigerian economy. Whereas, discretionary fiscal policy are government spending and tax actions that are taken to achieve specified macroeconomic goals johnston, 2009. The impact of fiscal deficits on economic growth in nigeria. How money is spent and from what source is the main component in a governments fiscal policy. How can fiscal policy support sustained longrun economic growth, while at. Fiscal deficits have no significant impact on economic growth in nigeria. A disaggregated approach ali danjumah umaru and ahmad usman gatawa department of economics,sokoto state university, sokoto email. An empirical retrospect of the impacts of government expenditures. Economic growth 8 poverty and unemployment 10 the balance of payments 10 inflation 12 fiscal policy and the government budget economic outlook 15.
Objectives of the study achieving price stability and ultimately economic growth is the major objective of monetary policy. It is importance to have uptodate data so the rebasing is a step in the right direction. Government spending and economic growth in nigeria. The paper provides a simple analytical framework that merges. Oct, 2014 it has not been used at all in places like united states of america. In these studies, researchers used economic development and economic growth interchangeably. 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. Hence, the gross domestic product gdp and gross national product gni have witnessed up surged in recent times. The study investigates the impact of fiscal policy on economic growth in nigeria for the period 19852018. The main objective of the study is to ascertain the effect of fiscal policy measures on growth of the nigerian economy. The impact of fiscal policy on the nigeria economy economics. The study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods.
The research material available to the researcher is insufficient, thereby limiting the study. Nigeria, fiscal policies, economic growth, debt to gdp ratio, ardl models. Fiscal policy in nigeria international monetary fund. The resulting swings in government expenditure have cancelled out the positive impact of oil revenues on economic development and poverty reduction.
This study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods. Fiscal deficits have significant impact on economic growth in nigeria. Fiscal policy and nigerian economic growth journal of. 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. The impact of monetary policy on the economic growth of nigeria. Economic and fiscal implications of nigerias rebased gdp gross domestic product gdp is an internationally recognised measure of economy size and strength. Department of accountancy akwa ibom state polytechnic, ikot osurua, ikot ekpene, nigeria email. Nigeria, agricultural sector still remains source of economic resilience in the nigerian economy. Nigerias economic performance in the two decades prior to economic reforms was generally poor. Each report will provide an assessment of the current economic situation in the country and give special attention to selected topics of high policy relevance for nigeria. The study was undertaken to ascertain impact of fiscal policies in nigeria economy. This article aims at determining the impact of various components of fiscal policy on the nigerian economy. This would go along way in assessing the extent to which the fiscal and monetary policies have impacted on the growth process of nigeria using the.
The economic growth through fiscal policy in nigeria is a mirage as a result of inconsistencies in government policies, wasteful spending, corruption and poor policy implementation. Monetary policy uses a variety of tools to economic growth, inflation, exchange rates with other. It was found out from the study of 73 countries over. 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. Fiscal and monetary policy instruments and economic growth. Observably, several factors like trade policy regime, quality of human resources, level of domestic. For a discussion of the growth impact of volatility on the nigerian economy, see world. Enahoro department of accounting, babcock university, ilishan, nigeria. Abstract the debate on the effectiveness of fiscal policy as a tool for promoting growth and development remains inconclusive given the positions of economic theories as well as conflicting results of past studies. The uniqueness of this study is that the outcome will assist in redesigning fiscal policy in nigeria in such a way to improve the activity that can lead to the increased employment of teeming unemployed youths and other resources. May 22, 2017 the scope of the study covers fiscal policy and economic growth in nigeria from 19802012.
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. Ogbole, amadi, and essi 2011 wrote on fiscal policy and its impact on economic growth in nigeria 19702006. This follows from studies that combine the economic with the functional. The positive impact of these policy tools on economic performance will help the country. 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 research work examines the fiscal policy and economic growth in nigeria 2000 2016. The nigeria economic report represents a new world bank product intended to be produced on a biannual basis. Impact of monetary policy of economic growth in nigeria. Implications of fiscal policy measures o n growth of the. The policy implication is that that both the shortrun and longrun expenditure has significant effect on economic growth of nigeria. Such problems include high unemployment rate, low investment, high rate of inflation and unstable foreign exchange rate. Ogbole, amadi and essi 2011 wrote on fiscal policy. An empirical trend analysis onyemaechi joseph onwe, ph.
This has lead to the introduction of instruments of monetary policy to regulate the value, supply and cost of money in. We can combine investment into a single variable, as well as split it into two. The shortrun dynamics adjusts to the longrun equilibrium at the rate of 60% per annum. Results of regression analysis 308 notes 311 references and other resources 315 boxes 1. Annual time series data from 1990 to 2007 was used. Some researchers estimated the effect of tax revenue on the economic development of nigeria using gross domestic product gdp. Fiscal and monetary policy and its effect on the growth of.
Ii, issue 4 july 20 appropriate policies, the relationship between government spending and economic growth can be maintained in the positive direction. Fiscal policy, public debt and monetary policy in emes. Determine the effect of petroleum profit tax on the performance of the nigerian economy. Fiscal policy, public debt and monetary policy in emerging. 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. This is contrary to persuasive monetary policy advice for inflation targeting pursued by central banks and the international monetary fund imf. It has not been used at all in places like united states of america. Impact of fiscal policy on the growth of agricultural sector in nigeria, 198120 okoh, abo sunday department of economics, federal university wukari, nigeria. 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.
Therefore, in line with the above objectives the following hypotheses are presented. The impact of fiscal policy on economic growth the keep. This study investigated the effect of fiscal policy on economic growth in nigeria. Econometric analysis of time series data from central bank of nigeria was conducted. The study developed and specified a multiple regression model to establish the relationship between the dependent variable and the. The information were sourced mainly from secondary sources such as central bank statistical bulletin, journals and magazines, which were subjected to multiple regression as the statistical tool for analaysis. Nigerias lack of effective fiscal rules means that the volatility of revenues from its extensive oil and gas resources spills over into national and local budgets. 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. The impact of fiscal and monetary policy on nigerian. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the nigerian economy. An appraisal of fiscal policy measures and its implication. Pdf this study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods find, read and cite all the research.
Over the period 1992 to 2002, annual gdp growth had averaged about 2. Pdf the impact of fiscal and monetary policy on nigerian. In fact, the industrial sector takes its roots from the agricultural sector. Generally, this study will dwell on the overview of monetary policy situations in the nigerian economy. Government spending and economic growth in nigeria1980.
The impact of monetary policy on the economic growth of. 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. Fiscalmonetary policy and economic growth in nigeria. According to adekunle 2002 the argument about fiscal policy is dated back to keynesian times, which predicted that expansionary fiscal policy increasing government expenditure or decreasing. Description fiscal policy and economic growth in nigeria.
Joining the debate between george and marshall on the effects of economic growth on the distribution of. Fiscal policy and economic growth in nigeria, 1970 2011. Analysis of the impact of fiscal policy on nigerias. Economic and fiscal implications of nigerias rebased gdp. The impact of fiscal and monetary policy on nigerian economic. Proposal the nigeria economy has been experiencing over the years the problems of unemployment, price level instability, lack of sustainable economic growth, balance of payment disequilibrium, inability to mobilize domestic saving and unsatisfactory expansion of domestic output. Fiscal policy is perhaps the single most important policy instrument available to governments of most developing countries for promoting growth and equitable distribution. Government expenditure and its implication for economic growth.
Pdf the effect of fiscal policy and monetary policy on. The study made use of expost facto research design. Data were collected from the central bank of nigeria cbn statistical bulletins. This paper has examined empirically the contribution of fiscal policy in the achievement of sustainable economic growth in nigeria. Public finances, fiscal policy, public spending, fiscal governance. 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. May 03, 2016 the research was adopted to examine the effect of fiscal policy on economic growth in nigeria. Ogbole et al 2011 carried a study on the comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods. Fiscal policy and economic growth in nigeria, 1970 2011 udokang, a. Impact of monetary policy of economic growth in nigeria includes abstract and chapter one, complete project material available impact of monetary policy of economic growth in nigeria proposal the nigeria economy has been experiencing over the years the problems of unemployment, price level instability, lack of sustainable economic growth, balance of. Specifically, the study will help in restructuring the tools of fiscal policy such as tax system and federal. 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. It was expected that an increase in government expenditure ceteris paribus will increase investment and hence.
These perceived problems are being claimed to have caused a fast decline in the economic growth of nigeria. Pdf on jan 1, 2012, martins iyoboyi and others published fiscalmonetary policy mix and economic growth responses in nigeria find. Operational performance of fiscal and monetary policies in nigerian financial institutions john a. The effect of fiscal policy on economic growth in nigeria. Public disclosure authorized nigeria economic report. Adefeso and mobolaji, 2010 while some other studies. Oct, 2014 this would go along way in assessing the extent to which the fiscal and monetary policies have impacted on the growth process of nigeria using the major objectives of fiscal and monetary policies. Theory and evidence 293 policy options 301 annex 9a.
In the cause of the study, there are some factors which limited the scope of the study. The scope of the study covers fiscal policy and economic growth in nigeria from 19802012. The role of fiscal policies in the development of nigerian. Being economy has long history of its economic problems irrespective of developing economy regardless of the nature of economic practices. Analysis of the impact of fiscal policy on nigerias economic. 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. 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. Contribution of agriculture to economic growth in nigeria 1. The impacts of public expenditures on economic growth have been revisited in this. A lot of literature exists on tax revenue and economic growth of nigeria adereti et al.
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