Fiscal Policy, and Economic Growth in Nigeria (2000-2024)
Abstract
This study examined the impact of fiscal policy and public debt on economic growth in Nigeria over the period 2000–2024. The persistent challenges of slow economic growth, rising public debt, recurrent fiscal deficits, and increasing debt servicing obligations have raised concerns regarding the effectiveness of fiscal policy in promoting sustainable economic development. An ex post facto research design was adopted, utilizing annual time series data obtained from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), Federal Inland Revenue Service (FIRS), Debt Management Office (DMO), and the World Development Indicators (World Bank). Gross Domestic Product (GDP) served as the proxy for economic growth, while government consumption expenditure, and tax revenue, were employed as explanatory variables. Data were analyzed using the Augmented Dickey Fuller (ADF) unit root test, , CUSUM stability test, and multiple regression analysis. The empirical results revealed that all variables were integrated of order one, I(1) The regression results showed that government consumption expenditure exerted a positive but statistically non-significant effect on economic growth (β = 0.233010; p = 0.2829), while tax revenue had a positive and statistically significant effect (β = 0.434179; p = 0.0004). Based on these findings, the study recommends that government should improve the efficiency of public expenditure through greater transparency and capital-oriented spending, strengthen tax administration and broaden the tax base to enhance domestic revenue mobilization, maintain fiscal discipline by ensuring that deficit financing supports productive investments, adopt prudent debt management strategies that limit excessive borrowing and prioritize concessional financing, and ensure that borrowed funds are channeled into economically viable projects capable of generating returns sufficient to sustain debt servicing and promote long-term economic growth