Falade and folorunso 2015 examined the relative effectiveness of fiscal and monetary policy instruments on economic growth sustainability in nigeria in order to determine the appropriate mix of. It, therefore, becomes necessary to highlight the monetary policy in nigeria. Monetary policy uses a variety of tools to economic growth, inflation, exchange rates with other currencies and unemployment. Effects of income tax changes on economic growth brookings. Gdp growth over the past five years has been unimpressive for such a resourcerich developing country. Their findings indicated that a percentage increase in fiscal deficit is capable of decreasing economic growth by 0. Policy makers and researchers have long been interested in how potential changes to the personal income tax system affect the size of the overall economy. The impact of fiscal and monetary policy on nigerian economic. The imf, therefore, advised the federal government to pursue a policy.
Economic growth here refers to annual increase in productivity which is often measured by gross domestic product gdp. Being economy has long history of its economic problems irrespective of developing economy regardless of the nature of economic practices. 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. The research material available to the researcher is insufficient, thereby limiting the study. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. This paper is set to contribute to the extant literature by investigating econometrically the existence or not of a longrun relationship between globalization and economic growth in nigeria and more precisely the. Therefore, in line with the above objectives the following hypotheses are presented. However and in contrast to the above, sekou 2015 in his study utilised ordinary least square method to estimate. In 2018, three global economic threats emerged from socioeconomic and political conflicts.
The paper examines fiscal policy regulations as a tool for enhancing economic growth and poverty reduction in nigeria using data covering the period 19812014 obtained from central bank of nigeria. Promoting economic growth in nigeria using time series analysis believed that the impact of monetary policy could be analyzed in terms of the behaviours of the intermediate targets of consumer price index and inflation rate in promoting economic growth in nigeria. In the cause of the study, there are some factors which limited the scope of the study. Emphasis on various components of public expenditure. Nigeria has over the years been controlling her economy through various. Impact of external debt on economic growth in nigeria. An empirical trend analysis onyemaechi joseph onwe, ph. Development strategy for nigeria shaping policy for development. Without significant structural policy reforms, nigerias mediumterm growth is projected to remain stable around 2%. The study analysed the effects of fiscal and monetary policies on economic growth in a panel of 47 subsaharan african economies from 1996 to 2016, using descriptive analysis, the econometric. Development strategy for nigeria moses akpobasah at a 2day nigeria meeting organized by the overseas development institute, london, 1617 june 2004 contact.
Aug 03, 2017 the international monetary fund imf, yesterday, said nigeria is expected to emerge from recession this year with an economic growth of 0. It is for this reason that this study is meant to investigate the impacts of fiscal policy on inflation rate in nigeria from 1970 to 20. May 22, 2017 the scope of the study covers fiscal policy and economic growth in nigeria from 19802012. The impact of monetary policy on the economic growth of nigeria. Keeping the balance in a deflationary period 14 global financial markets outlook. Structural policy and reform patterns in emerging market and developing economies. This paper has examined empirically the contribution of fiscal policy in the achievement of sustainable economic growth in nigeria.
These perceived problems are being claimed to have caused a fast decline in the economic growth of nigeria. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the nigerian economy. Fiscal deficits have significant impact on economic growth in nigeria. This study investigated the effect of fiscal policy on economic growth in nigeria. However, nigeria faces immense challenges in accelerating growth, reducing poverty and meeting the millennium development goals mdgs. World economic situation and prospects 2019 the united nations. Section 1 is the introduction, while section 2 contains theoretical and empirical literature. 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. They further opined a strong negative relationship between government consumption expenditure and economic growth in nigeria. The nigeria economy has been experiencing over the years the problems of unemployment, price level instability, lack of sustainable economic growth, balance of payment disequilibrium, inability to mobilize domestic saving and unsatisfactory expansion of domestic output. Fiscal policy and economic growth in nigeria, 1970 2011.
The impact of fiscal policy on the nigeria economy economics. Department of accountancy akwa ibom state polytechnic, ikot osurua, ikot ekpene, nigeria email. Can fiscal policy curb the problem of economic growth and development in nigeria. The positive impact of these policy tools on economic performance will help the country. Gdp growth over the past five years has been unimpressive for such a resource rich developing country.
This study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods. Their analysis was expressed using time series, which. Theory and evidence 293 policy options 301 annex 9a. To further understand the relationship between financial deepening and economic growth in nigeria for proper policy. Nigerian economic policy dispute hinders chances of recovery. Sep 26, 2016 a dispute between nigerias monetary and fiscal policy makers over how to lift the economy out of its worst slump in more than two decades may delay a recovery in africas most populous country. Ajide1 this paper investigates the role of frazer economic freedom index on fdi growth relationship over the period spanning 1980 through 2010 using annual time series data. Determinants of economic growth in nigeria kazeem b. Nigeria economic outlook top 10 themes for 2019 disclaimer this document has been prepared for general guidance on matters of interest only, and does not constitute professional advice. The main objective of the study is to ascertain the effect of fiscal policy measures on growth of the nigerian economy. 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. The study has become a necessity due to the deteriorating state of the public funds, in the area of revenue generation, allocation and implementation of fiscal policies in nigeria. Econometric analysis of time series data from central bank of nigeria was conducted. It was expected that an increase in government expenditure ceteris paribus will increase investment and hence.
This has informed the need to embark on the present study with a view to investigating the impact of external debt on economic growth of nigeria. This investigates the three elements of fiscal policy 1 government spending, taxation and the other source of revenue which finance public spending and the resulting budget deficit or surplus which occurs wherever government expenditure does not exactly equal revenue. The effect of fiscal policy on economic growth in nigeria. Fiscal deficits have no significant impact on economic growth in nigeria. Their major objective was to reestimate and reexamine the relative effectiveness of fiscal and monetary policies on economic growth in nigeria using annual data from 19702007. Impact of fiscal policy on inflation in nigerian economy. Cyclical improvements in argentina, brazil, nigeria and the rus. Fiscal policy and economic growth in nigeria, 1970 2011 udokang, a. The impact of fiscal and monetary policy on nigerian.
It has become necessary and indeed imperative to examine the flows of remittances to nigeria as well as the potential impact of these remittances on the performance of the economy. The study was undertaken to ascertain impact of fiscal policies in nigeria economy. Saibu 2015 adopted the model developed by scully 2003 for cote divoire. The study involves comparative analysis of the impact of fiscal policy on economic growth in nigeria during regulation and deregulation periods. The goal of the nigerian fiscal policy is best achieved via stable instruments, like government expenditure and interest rate. The human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. Economic growth has long been considered an important goal of economic policy with a. Results of regression analysis 308 notes 311 references and other resources 315 boxes 1. 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. Economic growth is defined as the process whereby the real per capita income of a. Fiscalmonetary policy and economic growth in nigeria. The study empirically examines the impact of monetary policy on economic growth in nigeria, in line with the. Download a free pdf of the report and data sets for each of the charts therein from the imf. The challenge for policy is to combine growth promoting policies with policies that allow the poor to participate fully in the opportunities unleashed and so.
Nigeria is one of two countries from africa among 11 global growth generators. The economy of nigeria is a middleincome, mixed economy and emerging market, with. Pdf fiscal and monetary policy instruments and economic. In 2017, global economic growth approached 3 per cent the highest. Impact of monetary policy of economic growth in nigeria. Growth forecast for emerging market and developing economies. The role of fiscal policies in the development of nigerian.
Fiscal policy and nigerian economic growth journal of. Jelilov and musa 2016 employed ols technique to examine the impact of government expenditure on economic growth in nigeria from 19812012. The results demonstrated that changes in monetary policy, rate. A multivariate regression approach was employed to estimate augmented growth models. Ogbole, amadi, and essi 2011 wrote on fiscal policy and its impact on economic growth in nigeria 19702006. One of the most important objectives of macroeconomic policy in recent years has been the rapid economic growth of an economy. Such problems include high unemployment rate, low investment, high rate of inflation and unstable foreign exchange rate.
Monetary policy rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money. May 03, 2016 this study investigated the effect of fiscal policy on economic growth in nigeria. Pwc nigerias economic alert is a series of publications on major topics, issues and events impacting the. The economic policy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the. Implications of fiscal policy measures o n growth of the. An examination of selected countries in subsaharan africa uche boniface ugwuanyi1 okelue david ugwunta2 1department of accountancy, enugu state university of science and technology enugu state, nigeria, 1email. World economic situation and prospects 2018 the united nations.
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