Fiscal Policy Maneuvers and Economic Growth in Nigeria

This study evaluated the relationship between fiscal policy maneuvers and economic growth in Nigeria from 1986 to 2022. Secondary data was sourced from the central bank of Nigeria statistical bulletin. Gross domestic product served as proxy for economic growth while federal government capital expenditure, federal government recurrent expenditure, federal government domestic debt, federal government foreign debt and federal government tax revenue proxy fiscal policy. The study employs unit root test and ARDL method to co-integrate, long run form and bound test, ARDL error correction regression, Granger Causality tests, the results revealed the stationarity of the model in level and 1st dif. the ARDL short run test showed a significant but negative relationship between government domestic debt and economic growth while government recurrent expenditure displayed to be positively significant with economic growth, long run form and bound test result showed the existence of co-integration, error correction regressions coefficient as well as the significant probability revealed the adjustment of the variable towards long run equilibrium to be -0.068548. We concluded that fiscal policy will propel economic growth and recommended that the concerned authority should set a moderate taxation, increase in its recurrent expenditure, effectively and efficiently channel the proceeds from domestic and foreign debts into capital projects as capital expenditure by majorly establishing domestic manufacturing industries which will create employments, increase productions and lead to economic growth in the long run in Nigeria.