Effectiveness of Monetary and Fiscal Policy Measures in Controlling Inflation in Nigeria

This study analyzed the effectiveness of monetary and fiscal policy measures in controlling inflation in Nigeria from 1985 to 2024. In order to achieve the objectives of the study, the study utilized annual time series data which were obtained from the Central Bank of Nigeria Statistical Bulletin, World Development Indicators of the World Bank, and National Bureau of Statistics. Also, monetary policy was proxied by broad money supply, lending rate and monetary policy rate, while fiscal policy was proxied by government expenditure and government tax revenue while inflation was measured by inflation rate. The major technique of data analysis adopted is Autoregressive Distributed Lag estimation technique. The findings showed that broad money supply and government expenditure have significant negative effects on inflation rate, lending rate and monetary policy rate have significant positive effects on inflation rate while government tax revenue exerted a negative but statistically insignificant effect on inflation rate. Based on the findings, the study concluded that monetary and fiscal policy measures exert significant but divergent effects on inflation dynamics in Nigeria, depending on the specific policy instrument and time horizon considered. It was recommended, among others, that the Central Bank of Nigeria pursue deliberate measures to reduce the cost of credit as a channel for moderating cost-push inflationary pressures, and that fiscal authorities sustain productive government expenditure that enhances supply-side capacity and eases inflationary pressures.