AN ANALYSIS OF THE IMPACT OF FISCAL POLICY ON ECONOMIC DEVELOPMENT IN NIGERIA

ABUBAKAR OKUWA ABDULLAHI¹ & ABUBAKAR ABBAS UTHMAN^2
1Department of General Studies,
School of General Studies and Pre-ND,
Isa Mustapha Agwai 1 Polytechnic Lafia, Nasarawa State, Nigeria
Email: abukuwa50@gmail.com

²Department of Business Administration and management,
School of Administration and Business Studies,
Isa Mustapha Agwai 1 Polytechnic Lafia, Nasarawa State, Nigeria
Email: amuamafeda@gmail.com  

Abstract

The quest for economic development has been the preoccupation of developing nations, Nigeria inclusive. The process involves the coordination of macroeconomic indices using different policy instruments of which fiscal policy is one. However, the conduct of macroeconomic environment in Nigeria is characterized by a lot of instabilities, inconsistencies and uncertainties which are constraints to the attainment of economic development, hence the need to examine the impact of fiscal policy in coordinating macroeconomic indices toward economic development in Nigeria. Total government revenue and total government expenditure were regressed on real GDP. Employing OLS technique, the results showed that though fiscal policy influences the level of economic development in Nigeria due to the significant impact of both total government revenue and total government expenditure on real GDP. However, the size of the coefficient of total government expenditure (2.709013) is less than that of total government revenue (2.875000) which may be attributed to factors such as over invoicing of government contract and expenditure on non-economic goods and services amongst others. The paper finally recommended the need for fiscal discipline in government expenditure in order to improve its impact on economic development in Nigeria.

Keyword: Fiscal Policy, Economic Development, Real GDP, Government Revenue, Government Expenditure.