Economic policy mix: An imperative for monetary credibility in Nigeria

This research examined the economic policy mix as an imperative for monetary credibility in Nigeria, covering a study period of 35 years spanning from 1988--2022. The paper sourced data from the Central Bank of Nigeria (CBN) Bulletin (2022). The study used the autoregressive distributed lag methodology. This study revealed that government expenditure (GOEX), tax revenue and greater trade openness significantly improve monetary credibility. However, lower monetary policy rates (MPRs) enhance monetary credibility. Moreover, the broad money supply (BMOS) does not significantly affect monetary credibility. The paper concludes that fiscal discipline, effective tax revenue collection strategies, low MPR, and high trade openness are crucial for maintaining monetary policy credibility. Consequently, the Nigerian government should prioritize policies that improve tax revenue collection efficiency and compliance. While ensuring that government-awarded projects undergo postproject audits, the emphasis of government expenditures should be on improving the educational sector and healthcare sector.