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Obiora Roselyn Ukamaka

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This study examined the relationship between fiscal policy and economic growth in Nigeria for the period 1986 to 2019. Essentially, the study examined the extent of relationship between some indicators of fiscal policy such as Government expenditures, Taxes, Overall fiscal balance and Economic growth. This study was undertaken because despite the various fiscal policy measures embarked upon by the federal government of Nigeria over the years of this study, the economy is yet to attain an acceptable level of economic stability. The study relied on secondary data obtained from the Central Bank of Nigeria statistical bulletin for various years. Regression analysis based on the classical linear regression model known as Ordinary least Square (OLs) technique was used to test the hypotheses. The model was analyzed using econometric and statistical criteria, unit-root test and co-integration test was also carried out. The results shows that Government Expenditure and Government Tax Receipt are positively related to the Real Gross Domestic Products which was used to capture economic growth while there is a negative relationship between the Overall Fiscal Balance and the Real Gross Domestic Product. In conclusion, we say that the use of Government expenditure, Government tax and deficits can lead to economic growth if used productively. We recommend that governments should ensure that the revenues generated from tax are channeled towards building capital stocks to create more jobs and generate more revenue to the government and also government should moderate the financing of deficits through borrowings which leads to debt crises, high interest rates in the domestic economy and worsening rate of unemployment in Nigeria. Keywords- Fiscal policy, Economic Growth, Real GDP, Government Expenditure, Government Tax Revenue, Fiscal Balance.

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