Impact of Fiscal Policy on Economic Growth in Nigeria
doi
Keywords:
Fiscal policy, Government expenditure, Taxation, Economic growth, Nigeria, ARDL Abstract
Purpose – This study investigates the impact of fiscal policy on economic growth in Nigeria over the period 1989–2024, focusing on how government expenditure, taxation, corruption, and inflation interact to shape macroeconomic performance. Design/methodology/approach – The study employs the Autoregressive Distributed Lag (ARDL) technique to analyze both short-run and long-run relationships among the variables. Data were sourced from the World Bank’s World Development Indicators (WDI) and
Transparency International. Unit root and bounds tests were conducted to ensure model stability and confirm the presence of cointegration. Findings – The results reveal that government expenditure and taxation exert positive and significant long-run effects on economic growth, while corruption and inflation hinder performance. In the short run, recurrent expenditure and inflation negatively influence growth, underscoring the importance of fiscal efficiency and stability. Practical implications – Fiscal policy should emphasize expenditure quality, efficient tax administration, and anti-corruption measures to enhance economic performance. Policymakers
should redirect spending toward capital projects and strengthen institutional frameworks to sustain growth. Originality/value – Unlike previous studies that examine fiscal policy in isolation, this study integrates revenue, expenditure, and institutional factors into a unified empirical framework, offering a contemporary perspective on Nigeria’s fiscal–growth nexus.
