Oil price shocks and fiscal policy management: Implications for Nigerian economic planning (1980-2009)

High Oil price fluctuations have been a common feature in Nigeria and these have considerably constituted a major source of fiscal policy disturbance to the Nigerian economy as well as the economies of other oil producing countries of the world. The over-reliance on oil production for income generation combined with local undiversified revenue and export bases is an issue for concern. This has policy implications for economic policy and in particular fiscal policy management. The motivation for this study is to examine the effect of oil price shock on fiscal policy in the country. Using structural vector autoregression (SVAR) methodology, the effects of crude oil price fluctuations on two major key fiscal policy variables (government expenditure (GEXP) and government revenue (GREV)), money supply (MS2) and GDP were examined. The results showed that oil prices have significant effect on fiscal policy in Nigeria within the study period of 1980: 1 to 2009: 4. The study also revealed that oil price shock affects GREV and GDP first before reflecting on fiscal expenditure. The study suggests strongly that diversification of the economy is necessary in order to minimize the consequences of oil price fluctuations on government revenue, by implication government expenditure planning in the country

Country-Specific Interactions Among Private Investment Economic Growth And Poverty Level In Three Selected Sub-Saharan African Countries. (1985-2010).

This study specifically examines the relations among private investment, economic growth and poverty level in Nigeria and its two neighbouring sub-Saharan African (SSA) countries of Benin Republic and Cameroon between the periods 1985 and 2010. The study employed Vector Error Correction Model using data extracted from the World Development Indicators. The study revealed that the relationships among private investment, economic growth, and poverty level did not follow expected pattern in the three countries. The results in Benin Republic show that increase in private investment and reduction in poverty level rather than increase real GDP growth, reduced real GDP growth overtime while the results obtained for Cameroon and Nigeria show that increase in private investment increased poverty level and reduction in poverty level reduced private participation in business in Cameroon and Nigeria. The study suggests a weak relation between private investment and economic growth or poverty level in the three economies.The study therefore recommends measures such as macroeconomic stability and adequate legal system that will ensure proper take off of private investment to boost economic growth and reduce poverty level in these three economies. Keywords: Private investment, public investment, economic growth, poverty and Vector Error Correction

Fiscal Behaviour of Subnational Governments in Nigeria: an Augmented Autoregressive Distributed LAG (ARDL) Approach

Purpose: The paper examined the determinants of fiscal behavior of subnational governments in Nigeria between 1981 and 2020. Approach/Methodology/Design: An Augmented Autoregressive Distributed Lag (ARDL) bounds test for cointegration which involves an extra F-test on the lagged level variables in the ARDL equation was employed. Findings: The results reveal that finances of the lower level of governments in Nigeria have not been managed optimally as there appeared a misplaced priority in terms of government outlay. Practical Implications: The implication presented in this paper is meant for the concerned authorities. The results indicate the need for the subnational governments in Nigeria to cut the overhead costs of governance by reducing the frivolous expenditures in order to curtail the incessant borrowing habit of these tiers of government locally and Internationally. Originality/value: Despite the fact that factors determining subnational fiscal behavior have been approached from diverse ideological and methodological perspectives, yet, the challenges linger on, the paper, therefore, employed sophisticated econometric technique to examine why the finances of the lower level of governments in Nigeria have not been managed optimally

Government Spending and Economic Growth in Nigeria: A VectorAutoregressive Modeling Approach

This paper examined the impacts of capital and recurrent public expenditures on gross domestic product and also determined the causal relationships between government spending and gross domestic product in Nigeria between 1970 and 2002. The data was subjected to an econometric analysis using the vector autoregressive (VAR) modeling approach. The result shows that aggregate government expenditure generally rises with increases in oil revenue but hardly declines when the increases ceased, resulting in destabilization in the economy. Both recurrent and capital expenditure exerted positive impact on economic growth (GOP) but the impact of the capital expenditure was greater. Also the causality test showed that promoting economic growth had been largely responsible for the increasing government spending in Nigeria. The study recommended that the over dependency of Nigeria on the oil sector as its main source of revenue should be reviewed. Furthermore, it is recom~ended that a larger proportion of total government spending should be allocated to capital expenditure