¹Endurance Gabriel Udo (Ph.D), ²Ekomabasi Akpan, ³Ofonime Moses Akpan(M.sc)

^1,3Department of Economics, School of Arts and Social Sciences, College of Education, Afaha Nsit

²Department of Economics, University of Uyo

DOI : https://doi.org/10.47191/ijsshr/v5-i2-29

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ABSTRACT

This study examined the impact of fiscal policy on economic growth in Nigeria over the period 1970 to 2019, using annual data obtained from secondary sources. Specifically, the study examines the impact of government expenditure (capital and recurrent) on Nigeria’s gross domestic product in regulated and deregulated fiscal regime. The econometric techniques of ARDL and Bound Cointegration were used to analyze the data. The results obtained from the analyses show that government capital expenditure had a significant negative relationship with economic growth in Nigeria in the deregulated period but an insignificant effect in the regulated period; while government recurrent expenditure had a significant positive relationship with economic growth in Nigeria in the deregulated period and an insignificant effect in the regulated period. The regression coefficient of the dummy variable (Regime) was positively signed and significant implying that there is a significant difference in the impact of fiscal policy across the two periods (regulation and deregulation). Thus, the study concluded that fiscal policy is more effective in the deregulated period compared the regulated period. Among the recommendations of this study are that the government should avoid extravagant capital expenditure.

KEYWORDS

Fiscal policy, economic growth, fiscal regimes

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VOlUME 05 ISSUE 02 FEBRUARY 2022