Implications of Fiscal Policy Measures on Growth of the Nigerian Economy

Thestudy examined factors surrounding measures of fiscal policy and its effect on economic growth in Nigeria from 1981 - 2014. The main objective of the study is to ascertain the effect of fiscal policy measures on growth of the Nigerian economy. It was expected that an increase in government expenditure ceteris paribus will increase investment and hence increase income via the multiplier. And that a higher tax reduces disposable income, investment opportunities and inhibits growth of the real gross domestic product. The researcher used Ordinary Least Squares (OLS) technique of multiple regression models using statistical time series data from 1981-2014. The statistical result' showed a positive relationship between the dependent variable (real gross domestic product) and the Independent variables (Government Expenditure and Taxes). This implies that the government expenditure is a strong determinant of economic growth especially when properly directed towards the provision of adequate basic infrastructural facilities to stabilize investment activities. The regression result also indicates that tax has a negative sign as a result of poor tax administration in Nigeria and over dependence of government on earnings from crude oil in funding her projects. Consequently, the result agreed with the endogenous theory, which supports that government involvement through the use of fiscal policy could step up economic activities hence growth. Based on the results, it was therefore suggested that there should be a total renovation of the tax system in Nigeria and the federal government of Nigeria should exaggerate her spending especially in the productive sectors of the economy that has the capability to contribute to economic growth in the country. Elosiuba, J. N. | Chukwuma, Edwin Maduka"Implications of Fiscal Policy Measures on Growth of the Nigerian Economy" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-6 , October 2017, URL: http://www.ijtsrd.com/papers/ijtsrd5766.pdf http://www.ijtsrd.com/management/accounting-and-finance/5766/implications-of-fiscal-policy-measures-on-growth-of-the-nigerian-economy/elosiuba-j-n