FISCAL POLICY AND ECONOMIC GROWTH IN NIGERIA

Abstract

Regardless of the nature of government and disparities in time several administration that has governed Nigeria since independence has introduced different fiscal policies geared towards enhancing the country its economic growth. Nevertheless, the country is still confronted with varieties of economic trajectories such as multi-dimensional poverty, persistence inflation, stunt growth of gross domestic and national product, high rate of unemployment, among others. Between 1986 and 2023, the research evaluated the effects of fiscal and monetary policies on growth in Nigeria's economic. In order to ascertain whether a long-term link existed among the factors, the ARDL Bounds co-integration test was used because the variables showed a mixed order of integration. For monetary and fiscal policy, the Auto Regressive Distributed Lag (ARDL) method was employed to estimate the models. The findings revealed a brief correlation between Nigeria's economic growth and variables related to monetary and fiscal policy. Economic growth was negatively correlated with interest rates and government revenue, but positively correlated with the broad money supply and government spending. No statistically significant difference in interest rates, government revenue, or government expenditure. Nonetheless, at the five percent significance level, the broad money supply was noteworthy. According to the report, the federal government and the Central Bank of Nigeria (CBN) ought to work together more closely and coordinate their policy goals. In order to coordinate monetary and fiscal policy, the government should also think about forming a committee with members from the Ministry of Finance and the CBN