Skip to content
Research Article Open access CC BY 4.0

How Sustainable is Fiscal Policy in Nigeria?

Falade Olanipekun Emmanuel, Fasoye Kazeem, Sikiru Adetona Adedokun

Asian Journal of Economics, Business and Accounting · pp. 20–29 · Published 14 Jun 2024

10.9734/ajeba/2024/v24i71389

Abstract

The rise in public debt has heightened fiscal sustainability challenges, with the potential of throwing countries into the risk of committing costly mistakes of accumulating public debt to unsustainable levels. The paper determines the extent of fiscal sustainability in Nigeria between 1981 and 2022 by comparing the existing level of the fiscal spending with the resources to pay it off. A technique of Dynamic Ordinary Least Squares (DOLS) is used to test for existence or otherwise of fiscal sustainability based on the inter-temporal budget constraint (IBC) and the results reveal a weak fiscal policy sustainability for Nigeria. It is recommended that the Nigerian government should ensure a reasonable cut in her frivolous spending so as to reduce the country’s continuous rise in debt profile. This is to enhance a higher level of fiscal sustainability for the African largest economy to ensure a more robust and systemic link between tax and expenditures policies that will not engender sustainable growth and development.

Debt expenditure revenue fiscal sustainability DOLS Nigeria

References (19)

  1. 1 Testing Intertemporal Budget Constraints: Theory and Applications to U. S. Federal Budget and Current Account Deficits [DOI]
  2. 2 Understanding Fiscal Space [DOI]
  3. 3 Annual report and statement of Accounts
  4. 4 The output effect of fiscal consolidation plans [DOI]
  5. 5 Effect of External Debt on Economic Growth and Development of Nigeria
  6. 6 Fiscal reform and fiscal sustainability: Evidence from Australia and Sweden [DOI]
  7. 7 Regime changes and the sustainability of fiscal imbalance in East Asian countries [DOI]
  8. 8 Assessing the fiscal stance in the European Union and the United States, 1970-2011 [DOI]
  9. 9 The Implication of Fiscal Principles and Rules on Promoting Sustainable Public Finances in the EU Countries [DOI]
  10. 10 Fiscal regime changes and the sustainability of fiscal imbalance in South Africa: a smooth transition error-correction approach [DOI]
  11. 11 Public Debt Vulnerabilities in Low-Income Countries - The Evolving Landscape [DOI]
  12. 12 Public spending, fiscal sustainability and macroeconomic performance in Nigeria [DOI]
  13. 13 Effect of Fiscal Instability on Economic Growth in Nigeria [DOI]
  14. 14 The Indonesia's State Budget Sustainability and Its Implication for Financial System Stability *)
  15. 15 PUBLIC DEBT SUSTAINABILITY Evidence from Developing Country
  16. 16 Fiscal Policy and Public Debt Sustainability in Nigeria [DOI]
  17. 17 Legal and Economic Perspectives to Sustainable Sovereign Debt Management in Nigeria: Energy Poverty in Perspective [DOI]
  18. 18 Fiscal Policy and Sustainability of Public Debt: The Nigerian Experience [DOI]
  19. 19 Public Investment and Welfare: Theory and Empirical Implications

Cited by 0

No indexed citations yet.

Related research

Article metrics

Real usage data collected on this platform.

22

Page views

0

PDF downloads

2

Outbound clicks

0

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.