In this study, recent development in government expenditure and epistemological literatures on the relationship between public spending and economic growth in Nigeria are examined. The primary aim of this paper is to explore the relationship between government expenditure and economic growth with the view to establishing a stable relationship. In view of that, an ARDL model is employed to provide the framework for estimating the existence or otherwise of the equilibrium relationship among the examined variables. However, government as an institution that provide welfare to the populace has a major role to play in deciding where priority spending should be allocated in order to enhance the developmental process and provide sustainable growth in the growing economy. In all submissions that debated on the relationship between public sector spending and economic growth, Keynesian philosophy was among the most prominent and celebrated in contrast to Wagner's Law. Keynes regards government spending as an exogenous factor which can be utilised as a policy instrument to promote economic growth. Despite the diverse and conflicting empirical evidence on the relationship between public sector expenditure and economic growth that prevail in the literature, the empirical findings from this paper based on the estimated result from ARDL model reveals the existence of positive and significant relationship between public spending on economic growth in Nigeria. Undeniably, government expenditures are considered to be highly important in creating opportunities and widening the productive base at Review Article 2 which developing countries can grow, Nigeria is inclusive. To achieve accelerated economic growth, there is need for an in-depth and broad macroeconomic reform in the Nigerian public finance to include certain features of transparency and effectiveness in the implementation of budgetary process. An essential part of the reform policy should be the review of public sector's roles and responsibilities in the development process and concentrate on the priority areas rather than act as a substitute of the private sector. The inclusion of certain measures on the reform policy will appear satisfactory, for instance, expenditure on public goods that improves the allocative efficiency in the presence of positive externalities should be accorded high priority, including investment in infrastructure, more access to information and communication technology, expenditure on research and development, as well as diversification of the economy.
The rate of inflation over the last three decades in Nigeria has significantly increased thereby affecting the macroeconomic growth and international competitive drive of the growing economy. The magnitude of this inflationary trends may be largely explained by the rapid growth of money supply motivated by the expansionary fiscal policies of the public sector, in addition to exchange rate fluctuation and poor diversification of the economy. After numerous attempt by successive administrations to regulate this economic problem using both monetary and fiscal policies, efforts seems to be abysmal. As a result, this paper is designed to explore the inflationary trend in Nigeria with the view to determining it impact on economic growth. The study adopted a descriptive method and further utilised charts to show the inflationary trend and GDP growth in order to provide better understanding on how inflation rates in Nigeria affects the desired level of economic growth. This is necessary because identifying the possible relationship between inflation and economic growth may expedite the process of realising the feasible policy options to be adopted towards achieving sound macroeconomic growth in Nigeria. This study therefore concludes that the current inflationary trend in Nigeria is negatively affecting the realisation of sustainable growth and development. This implies that one of the necessary requirement for attaining the desired growth level in Nigeria is to control the excessive increase in inflation rate. As a recommendation, there is need for the public sector to design a suitable framework that will encourage local
Article HistoryOver the years in Nigeria, the trend of fiscal expenditures continues to increase rapidly without any corresponding increase in the level of revenue. This scenario had deteriorated the fiscal stability resulting in high rate of deficits and domestic debt, as well as inducing more inflationary pressure within the market-oriented economy. In view of the decreasing price of crude oil in the international market accompanied by lower revenue generation, the rising inflationary pressure has continued to serve as a major obstacle to ensuring sustainable growth in Nigeria. With the monetary policy being constrained in addressing this problem as a result of the prevailing exchange rate regimes which adversely affect the activities of the commercial banks, this gave fiscal policy the opportunity to carry the main task of macroeconomic stabilization in Nigeria. It is in view of this background that this paper is aimed at evaluating the effects of fiscal operations on macroeconomic growth in Nigeria. Enormous literature related to fiscal operations in both developed and developing countries are reviewed, and the trends of fiscal variables are also presented. The paper adopted a descriptive method and utilized both charts and table to show the trend of fiscal elements with the aim of determining the relationship among the variables. The paper concludes that fiscal operation is ineffective in providing the needed macroeconomic environment for sustainable growth. Therefore, there is need for government to reduce the size of its deficits, broaden the revenue base by increasing the contribution from non-oil sources, and synchronize both monetary and fiscal policies in order to ensure growth and maintained stability in the economy. Also, an effectively implemented fiscal policy programs could play a vital role in overcoming these instabilities on the economy by providing a suitable framework for a more stable and predictable budget. Nevertheless, mere quantitative implementation of fiscal programs will not change the impacts of these instabilities on the economy unless viable pro-active measures are taken to fight corruption and to strengthen transparency and accountability of fiscal management in the public sector.Contribution/ Originality: This study contributes in the existing literature by providing a better understanding on how fiscal operations affect the macroeconomic condition of the Nigerian economy using a descriptive analysis. The paper utilized a recent dataset (2010 base year) for more than 3 decades with the view to establishing reliable findings. INTRODUCTIONIn recent years, the growth and performance of key macroeconomic indicators in many developing countries has decelerated. The current recession and tightening of global financial conditions in addition to financial market volatility may lead to a decrease or reversals of capital inflows. Since the risk to capital flows can limit monetary policy in these countries, the choice of fiscal policy as a countercyclical tool becomes highly essen...
While there are numerous studies on the relationship between monetary policy and economic growth, evaluating the policy nexus between the two phenomena remain inconclusive. Undeniably, monetary policy is believe to influence the employment level, price stability, growth of aggregate output and equilibrium in the balance of payment-for the case of developing economies. But the magnitude of its influence largely depends on how it is conducted through various channels and the independency of the apex bank to select the appropriate instruments for formulating the monetary policy. In lieu of that, this study examines the relationship between monetary policy and economic growth in Nigeria using time series data covering the period of 1980 to 2017. The study employs the Cointegration test and the Ordinary Least Square (OLS) technique with the view to estimating the model coefficients and showcase the policy nexus between the variables. Result indicates the existence of long-run relationship between monetary policy indicators and economic growth. Further empirical findings show that money supply has positive effect, while both exchange rate and interest rate have negative effect on the real GDP. As such, monetary authorities in Nigeria should adequately managed and monitored the growth level of money supply in order to realise the desired growth level. Given the socio-economic and political conditions in Nigeria, there is growing needs to formulate appropriate monetary measures which might encourage borrowing through sound and productive interest rate as well as stable exchange rate.
One of the most burning issues that have dominated the public sphere in Nigeria and other oil exporting countries is the covid-19 pandemic and its attendant challenges. This pandemic is a shock on real economic fundamentals and frictionless of the market. It introduces a barrier between the market forces with strong complementary feedbacks in the real economy. The absence of precise vaccine or medication for the virus has necessitated the adoption of several precautionary measures with the aim of containing its wide spread. Critical among which are the travel restrictions, lockdown measures as well as social and physical distancing. These measures have detrimental effect on the demand and price of oil in the international market. In view of that, this study evaluates the social and economic impact of covid-19 in Nigeria taking into cognisance the effect on certain critical macroeconomic indicators. The study adopted an analytical approach to supplement the much ongoing documentations on the subject matter. Result shows that virtually all essential macroeconomic indicators are grossly affected with tax, remittances and employment exhibiting severe consequences. Also, uncertainty, panics and lockdown measures are key to motivating higher decrease in world demand. The supply disruptions and huge death toll generates a heightened uncertainty and panic for household and business. This uncertainty and panic leads to drop in consumption and investment thereby causing a decrease in corporate cash flows and triggered firm’s bankruptcy. Also, lay-off and exiting firms produce higher unemployment while labour income decreased significantly. Since it entails a large amount of government expenditure especially in the health sector which is required to contain the spread of the virus, there is needs for government to diversify its revenue sources and thus drop over dependency on the oil remittance. Furthermore, there is a need to support the financial system to avoid the health crisis becoming a financial crisis in the long-run.
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