Fiscal policy and economic growth in nigeria pdf download

Emphasis on various components of public expenditure article pdf available november 2015 with 247 reads how we measure reads. It is used in conjunction with the monetary policy implemented by central banks, and it influences the economy using the money supply and interest rates. Analysis of the impact of fiscal policy on nigerias economic. An overview benedict clements, sanjeev gupta, and gabriela inchauste fiscal policy can foster growth and human development through a number of different channels. The study was undertaken to ascertain impact of fiscal policies in nigeria economy. Introduction m onetary policy outcomes vary greatly depending on both the target and instrument in use. The study investigates the impact of fiscal policy on economic growth in nigeria for the period 19852018. A disaggregated approach ali danjumah umaru and ahmad usman gatawa department of economics,sokoto state university, sokoto email. The study made use of expost facto research design.

This paper is set out to investigate monetary and fiscal policy has tools for economic growth in nigeria and to also investigate which of this tools is most appropriate in the nigerian present state of economy using time series data spanning from 1981 to 2014. Babajide, isibor areghan akhanolu and okafor tochukwu subject. Objectives of the study achieving price stability and ultimately economic growth is the major objective of monetary policy. Orszag, senior fellows, the brookings institution, february 3, 2003. The economic recovery and growth plan ergp, a medium term plan for 2017 2020, builds on the sip and has been developed for the purpose of restoring economic growth while leveraging the ingenuity. This investigates the three elements of fiscal policy 1 government spending, taxation and the other. 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. Emphasis on various components of public expenditure. The problem faced in the country is the lack of assessment of what form of fiscal policy rules will perform better in reducing debt accumulation and promote investment and the necessary medium term budget deficit stability. May 22, 2017 the scope of the study covers fiscal policy and economic growth in nigeria from 19802012. Nigerian institute of social and economic research. The realization of this growth undoubtedly is not automatic but requires policy guidance, which are fiscal and monetary policy instruments which are the main.

Generally, this study will dwell on the overview of monetary policy situations in the nigerian economy. This is contrary to persuasive monetary policy advice for inflation targeting. In the case of nigeria, ajayi 1974, ajisafe and folorunso 2002 and adefeso and mobolaji 2010 found that monetary policy impacted greater influence than fiscal policy while olaloye and ikhide 1995, philip 2009 and medee and nenbee 2011 argued that fiscal policies are more crucial for economic growth. Pdf this article aims at determining the impact of various components of fiscal policy on the nigerian. 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. Theory and evidence 293 policy options 301 annex 9a. This study investigated the effect of fiscal policy on economic growth in nigeria. The effects of fiscal policy on nonoil economic growth.

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. Economic growth 8 poverty and unemployment 10 the balance of payments 10 inflation 12 fiscal policy and the government budget economic outlook 15. The objective of fiscal policy is to create healthy economic growth. The magnitude and structure of growth in the nigerian economy in the newly rebased gdp figures also demonstrate some major differences from previous estimates table 3. Adefeso and mobolaji, 2010 while some other studies. The paper examined the impact of monetary policy on economic growth in nigeria by developing a model that is able to investigate how monetary policy of the government has affected economic growth through the use of multivariable regression analysis. The research material available to the researcher is insufficient, thereby limiting the study. The effect of fiscal policy on economic growth in nigeria science. Impact of monetary policy on economic growth in nigeria.

The impact of monetary and fiscal policies on nigerian. This article aims at determining the impact of various components of fiscal policy on the nigerian economy. The various tools of fiscal policy such as budget, taxation, public expenditure, public works and public debt can go a long way for maintaining full employment without inflationary and deflationary forces in underdeveloped economies. It is also evident from some studies that monetary rather than fiscal policy impacted a strong and significant influence on the growth of the nigerian economy ajisafe and folorunso, 2002.

In chapter three, which is the structural composition, the macroeconomic policy as it affect nigeria. Given the fact that both monetary and fiscal policies impact on economic growth and development, it is not surprising that they are entwined. 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. This is contrary to persuasive monetary policy advice for inflation targeting pursued by central banks and the international monetary fund imf. The purpose of the paper is to examine the effect of fiscal policy variables on economic growth in south africa. The scope of the study covers fiscal policy and economic growth in nigeria from 19802012. The general objective of the study is to look at the impact of fiscal and monetary policy on the economic growth of nigeria. Both can have a significant impact on economic activity, and it is for this reason that financial analysts need to be aware of the tools of both monetary and fiscal policy, the goals of the monetary and fiscal authorities, and most important the monetary and fiscal policy transmission mechanisms. Theory envisage that fiscal policy can impinge on economic growth by changing motivation for investment and labour as well as by altering aftertax proceeds across sectors.

Department of accountancy akwa ibom state polytechnic, ikot osurua, ikot ekpene, nigeria email. Fiscal policy, public debt and monetary policy in emes. Monetary policy and its effectiveness on economic development in nigeria author. A comparative analysis course development economics grade 3. Nbs, pwc analysis exports are likely to outpace imports on strong oil export revenues and shrinking import demand real gdp growth to reach 2. 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. 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 fiscal policy variables considered in the study include government gross fixed. An appraisal of fiscal policy measures and its implication. This study sought to determine the effect of fiscal policy variables on the economic growth. 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. Pdf fiscal and monetary policy instruments and economic. Oct, 2014 it has not been used at all in places like united states of america. 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.

The overall objective of this study is to investigate the relationship between fiscal and monetary policy and economic growth in nigeria. 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. This study uses secondary data which were obtained from the statistical bulletin of the central bank of nigeria. Fiscalmonetary policy and economic growth in nigeria. Results of regression analysis 308 notes 311 references and other resources 315 boxes 1. Can fiscal policy curb the problem of economic growth and development in nigeria. Omojimite and iboma 2012 on their paper focused on fiscal deficit and the productivity of the nigeria. Pdf fiscal policy and economic growth in south africa. The impact of fiscal and monetary policy on nigerian economic.

Thus, monetary policy plays a stabilizing role in influencing economic growth through a number of channels. An empirical trend analysis onyemaechi joseph onwe, ph. An empirical perspective niser monograph series, p 10. Description fiscal policy and economic growth in nigeria. 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. Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme 5 governments fiscal. 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 and monetary policy and economic growth in nigeria. The impact of fiscal policy on the nigeria economy economics.

Fiscal policy is how congress and other elected officials influence the economy using spending and taxation. This paper has examined empirically the contribution of fiscal policy in the achievement of sustainable economic growth in nigeria. In the case of nigeria, ajayi 1974, ajisafe and folorunso 2002 and adefeso and mobolaji 2010 found that monetary policy impacted greater influence than fiscal policy while olaloye and ikhide 1995, philip 2009 and medee and nenbee 2011 argued that fiscal policies are more crucial for economic growth in the country. In this reading, we have sought to explain the practices of both monetary and fiscal policy. Fiscal policy and economic growth in romania cosmin enache1 abstract. The connection between fiscal policy and economic growth is not a strong one, taking into account that fiscal policy is not a fundamental source of growth. Fiscal and monetary policy instruments and economic growth. The positive impact of these policy tools on economic.

The impact of monetary and fiscal policies on nigerian economic. An econometric analysis of the monetary policy reaction. Though, the imf upgraded its growth forecast for the global economy in 2018 to 3. Econometric analysis of time series data from central bank of nigeria was conducted. Pdf the impact of fiscal and monetary policy on nigerian.

Econometric analysis of time series data from central bank of nigeria. The positive impact of these policy tools on economic performance will help the country. Wide range of literature is available on the important role of fiscal policy in fastening economic growth. In the medium and long term, fiscal policy also plays a significant role in the economy. Emphasis on various components of public expenditure article pdf available july 2014 with 3,329 reads how we measure reads. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the nigerian economy. Ii oil revenues and fiscal sustainability in nigeria. This research work focus on econometric analysis of the impact of fiscal policy on nigeria economy. Being economy has long history of its economic problems irrespective of developing economy regardless of the nature of economic practices.

This study sought to determine the effect of fiscal policy variables on the economic growth of subsaharan african countries. Fiscal deficits have significant impact on economic growth in nigeria. The study developed and specified a multiple regression model to establish the relationship between the dependent variable and the. The impact of fiscal and monetary policy on nigerian. Impact of fiscal policy instrument 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.

Fiscal and monetary policy instruments and economic growth sustainability in nigeria article pdf available september 2015 with 9,183 reads how we measure reads. In the cause of the study, there are some factors which limited the scope of the study. Therefore, in line with the above objectives the following hypotheses are presented. An econometric investigation abubakar risk of overheating. Data were collected from the central bank of nigeria. 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. The main objective of the study is to ascertain the effect of fiscal policy measures on growth of the nigerian economy. The positive impact of these policy tools on economic performance will help.

On the other hand, the study found that a significant negative relationship exists between fiscal deficits, financial depth and economic growth in nigeria. The impact of fiscal deficits on economic growth in nigeria. Fiscal policy and economic growth in nigeria, 1970 2011 udokang, a. Public disclosure authorized nigeria economic report.

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. 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. Ogbole, amadi, and essi 2011 wrote on fiscal policy and its impact on economic growth in nigeria 19702006. May 03, 2016 the research was adopted to examine the effect of fiscal policy on economic growth in nigeria. Pdf implications of fiscal policy measures on growth of. Fiscal and monetary policy and its effect on the growth of. Fiscal policy and nigerian economic growth journal of. Economic growth gets a boost from high oil prices nigeria. The effect of fiscal policy on economic growth in nigeria.

As is well known, public policy neoclassical growth models consign the role of fiscal policy to one of determining the level of output rather than the longrun growth rate kneller, et al. The major objective is to identify the contribution of fiscal policy to nigeria economic. Impact of monetary policy of economic growth in nigeria. Effect of fiscal instability on economic growth in nigeria horizon. Even so, government authorities could use fiscal policy to affect in an indirect manner the economic growth. However, the scope of such a role may be limited by the concurrent pursuit of other primary objectives of monetary policy, the nature of monetary policy. Fiscal deficits have no significant impact on economic growth in nigeria. Monetary and fiscal policy, tools for economic growth. Fiscal policy and economic growth in nigeria, 1970 2011.

Data were collected from the central bank of nigeria cbn statistical bulletins. Role of fiscal policy in economic development of under developed countries. Fiscal policy, public debt and monetary policy in emerging. It is also evident from some studies that monetary rather than fiscal policy impacted a strong and significant influence on the growth of the nigerian economy. Thestudy examined factors surrounding measures of fiscal policy and its effect on economic growth in nigeria from 1981 2014. The empirical analysis supported the existence of a significant positive relationship between economic growth and the regressors capital, labour, inflation rate, and trade openness. 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.

Obviously, taxation and public expenditure is a powerful instrument. The goal of the nigerian fiscal policy is best achieved via stable instruments, like government expenditure and interest rate. 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. An econometric analysis of the monetary policy reaction function in nigeria 1 1 1.