Impact of Macroeconomic Policies on Balance of Payment in Nigeria

The study investigates the impact of macroeconomic policies on the balance of payment in Nigeria from 1981 to 2022. Three specific objectives guide the study; to examine the effects of government spending, government tax revenue, and monetary policy rate on balance of payment. Annual time series data were used for the study source from CBN Statistical Bulletin of 2022 edition. The expos facto research design was employment given the fact that the researcher does not influence the data variables. This was complemented by the Autoregressive and Distributed Lag (ARDL) model to analyzed the data. The result from the bound test shows that there is long run relationship between macroeconomic policies and balance of payment, and that balance of payment is expected to converge to equilibrium from the short run errors of disequilibrium by 106.23 adjustment speed. More so, government spending and tax revenue has negative effects on BOP in both short and long terms. While monetary policy rate has only long term significant and positive effect on BOP. The study concluded that the estimated model has a good fit and stable within the period of study. It is then recommended that government spending should be production motivated to enhance export and investment in portfolios. This will weaken the negative effects of the fiscal policy on BOP.