The Effect of Fiscal Policy on Economic Growth in Nigeria
Journal of Finance and Accounting
Volume 4, Issue 3, May 2016, Pages: 140-145
Received: Apr. 24, 2016; Accepted: May 7, 2016; Published: May 20, 2016
Views 40872      Downloads 736
Ubesie Madubuko Cyril, Department of Accountancy, Faculty of Management Sciences, Enugu State University of Sciences and Technology, Enugu, State, Nigeria
Article Tools
Follow on us
This study investigated the effect of fiscal policy on economic growth in Nigeria. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the Nigerian economy. 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. Descriptive statistics and the ordinary least square (OLS) multiple regression analytical method was used for the data analysis after ensuring data stationarity. The results from the analysis revealed that total government expenditures is significantly and positively related to government revenue, with expenditures climaxing faster than revenue. Investment expenditures were much lower than recurrent expenditures evidencing the poor growth in the country’s economy. Consequently, it is recommended that government should formulate and implement viable fiscal policy options that will stabilize the economy. This could be achieved through the practice of true fiscal federalism and the decentralization of the various levels of government in Nigeria.
Fiscal Policy, Expenditure, Economic Growth, Sationarity, CBN, OLS, GDP
To cite this article
Ubesie Madubuko Cyril, The Effect of Fiscal Policy on Economic Growth in Nigeria, Journal of Finance and Accounting. Vol. 4, No. 3, 2016, pp. 140-145. doi: 10.11648/j.jfa.20160403.16
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abdullah H. A, (2000). The Relationship between Government Expenditure and Economic Growth in Saudi Arabia. Journal of Administrative Science, 12 (2): 173-191.
Adeoye, T. (2006). Fiscal Policy and Growth of the Nigerian Economy: NISER monograph series, p. 10.
Agu, S. U., Idike, A. N., Okwor, I. M., & Ugwunta, D. (2014). “Fiscal Policy and Economic Growth in Nigeria: Emphasis on Various Components of Public Expenditure,” Singaporean Journal of Business Economics and Management Studies, 2 (12), 2014.
Albala-Bertrand, J., and E. Mamatzakis, 2001, “Is Public Infrastructure Productive? Evidence from Chile,” Applied Economics Letters, Vol. 8, pp. 195-198.
Amadi, S. N. and Essi, I. D. (2006). “Government Economic Policy and Nigerian Capital Market Behaviour: A Causality Analysis.” J. Dev. Alternatives Area Stud., San Antonio, USA.
Anyanwu, J. C. (2007). Nigerian Public Finance. Onitsha: Joanee Educational Publishers Ltd.
Aschauer, D. A. (1989). “Does Public Capital Crowd Out Private Capital?” Journal of Monetary Economics, 24, l71-188.
Dar-Atul, A. and Amirkhalkhali, S. (2002).“Government Size, Factor Accumulation and Economic Growth: Evidence from OECD Countries”, Journal of Policy Modeling. 24, 679-692.
Dornbusch R, and Fischer, S. (1990). Macroeconomics (5thed.) New York: McGraw-Hill Publishing Company.
Ekpo, A. (1994). Public Expenditure and Economic Growth in Nigeria 1960 to 1992, Final Report. Nairobi: AERC.
Gbosi, A. N. (1998). Banks, Financial Crisis and the Nigerian Economy Today. Owerri: Corporate Impression Publishers.
Gbosi, A. N (2008), “Contemporary Macroeconomic Problems and Stabilization Policies”, Port Harcourt: Automatic Ventures.
Ghosh, S. and Roy, U. (2004). Fiscal Policy, Long-Run Growth, and Welfare in a Stock-Flow Model of Public Goods. Canadian Journal of Economics, 37 (3), 742-756.
Jerono, R. (2009). The impact of government spending on economic growth in Kenya.
Khosravi, A. and Karimi, M. S. (2010). To Investigate the Relationship between Monetary Policy, Fiscal Policy and Economic Growth in Iran: Autoregressive Distributed Lag Approach to Cointegration. American Journal of Applied Sciences, 7 (3), 420-424.
Maingi, J. (2010). The impactof public expenditure on economic growth in Kenya. Ph.D. Thesis, Nairobi, Kenyatta University: Unpublished.
Mansouri, B. (2008). Fiscal Policy and Economic Growth: Egypt, Morocco and Tunisia Compared. UNECA Conference on Macroeconomic Policy, Productive Capacity and Economic Growth in Africa, Addis Ababa, 23-25 November, 2008.
Mitchell, J. D. (2005). The Impact of Government Spending on Economic Growth. Backgrounder, 1831. [].
Ndiyo, N. A. and Udah, E. B. (2003). Dynamics of Monetary Policy and Poverty in a SmallOpen Economy: The Nigerian experience, Nigerian Journal Economics and Development Matters, 2 (4), 40-68.
Nijkamp, P. and Poot, J. (2004). Meta-analysis of the effect of Fiscal Policy on Long-Run Growth. European Journal of Political Economy, 20, 91-124.
Nurudeen, A. and Usman, A. (2010).“Government Expenditure and Economic Growth in Nigeria, 1970-2008: A Disaggregated Analysis”. Business and Economics Journal, Volume 2010: BEJ-4, 1-11.
Nwankwo, A. (2010). Nigeria’s Foreign Debt: The Good, Bad and Bizzare – Vanguard 17th Nov.,
Ogbole, O. F., Amadi, S. N., &Essi, I. D. (2011). Fiscal policy: Its Impact on Economic Growth in Nigeria 1970 to 2006. Journal of Economics and International Finance, 3 (6), 407–417.
Okemini, E. B, andUranta, D. T. (2008). Poverty & Criminality in the Niger-Delta Region: A critical Analysis. Integrated Soc. Mgt. J., 1 (2): 1-8.
Okwo, I. M. (2010). “An Overview of Public Debt and its Management Strategies in Nigeria (1980-2007). ESUT Journal of Accountancy 1, 237-248.
Olajide, B. and Adekoya, F. (2012). “Economic Healing: Revisiting 2012 Fiscal Policy”
Onoh, O. (2007). Dimensions of Nigeria’s Monetary and Fiscal Policies-Domestic and External. Aba: Astra Meridian Publishers.
Onwe, O. J. (2014). Impacts of Fiscal Policy Components on Economic Growth in Nigeria: An Empirical Trend Analysis.
Oyinlola, O. (1993). “Nigeria’s National Defence and Economic Development: An Impact Analysis”. Scadinavian Journal of Development Alternatives, 12 (3).
Samson, A. A. (2013). Government spending and economic growth: evidence from Nigeria.
Samuelson, P. A., and Nordhaus, W. D. (1998). Economics (16thed). Boston: Irwin/McGraw-Hill.
Swaroop, V., Devarajan, S. and Heng-fu, Z. (1996). The Composition of Public Expenditure and Economic Growth. Journal of Monetary Economics, (31), 112-122.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186