limitations of fiscal policy in nigeria

changes as well as the openness of the country’s Nigerian economy are some of Nigeria Economy A. Ogar, S. E. Nkamare & E. G. Emori Department of Banking & Finance, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State - Nigeria ABSTRACT The study examined the empirical link on the effect of fiscal and monetary policy on the Economic Growth of Nigeria (1986-2010). Nigerian economy has not been stable over the years as a result, the country’s In view of such a situation, let us understand fully problems and limitations which are associated with a fiscal policy. 5. Isaksson, This work is set to do a thorough assessment of the impact of fiscal policy on Nigeria economic growth. A. 2.6 Indication of monetary policy Fiscal policy must be designed to be performed in two ways-by expanding investment in public and private enterprises and by diverting resources from socially less desirable to more desirable investment channels. Fiscal Policy is the use of Government spending and taxation levels to influence the level of economic activity. Fiscal Expenditure in Nigeria averaged 1400.82 NGN Billion from 2010 until 2020, reaching an all time high of 2627.38 NGN Billion in the fourth quarter of 2019 and a record low of 743.65 NGN Billion in the first quarter of 2011. Some of the major limitations of fiscal policy are as follows: Although fiscal policy gained prominence during world depression of 1930’s, yet its practical application has a number of problems or limitations. Government The Federal Government of Nigeria (FGN) has approved and ordered the implementation of the 2019 Fiscal Policy Measure (2019 FPM), effective 1 July 2019. country’s economic activities has led to the periodical increase in the outcome of this study will be a useful guide for the government of Nigeria, (2001), Antovic Ventures, Port Harcourt. environment because there is low capacity utilization attributed to shortage in Gbosi, A.N. The first phase (1959-1986) placed emphasis on direct monetary controls, while the second phase (1986-date) relies on market mechanisms or market-based controls. 1980s. The economy shrank by 3.62% in Q3'20, the second consecutive quarterly contraction. 142 June, (2003). Fiscal Operations in a Depressed Economy: Nigeria, 1960-90 by Akpan H. Ekpo and John E. U. Ndebbio, Research Paper 44 . Fiscal policy is one of such policies that government uses to correct market imperfections and failure. The purpose of the Nigerian fiscal policy is divided into two. If the government plans to increase spending – this can take a long time to filter into the … It had been some years ago since the fiscal policy was put together by the Nigerian government to see to all the needs highlighted earlier. This study uses secondary data which were obtained from the Statistical Bulletin of the Central Bank of Nigeria (CBN) covering the period from 1985 to 2015. - WP/03/155 Created Date: 8/11/2003 8:12:31 PM The fiscal policy thrust used in manipulating the economy depends on Notify me of follow-up comments by email. Institutions and Money, 11(2001), 309-338. 1.5 SIGNIFICANCE OF THE STUDY However, this research work will assist the economy to derive possible solution to the research problem e.g. following are the significance of this study: 1.  The fiscal policy: Abstract: Two of Nigeria's basic problems, unemployment and a general inflationary tendency, could probably be solved by short-term fiscal measures, which, however, will not solve the problems thoroughly. Nigeria is not enjoying price stability in the least. Fiscal policy and economic growth relationship was the focus of the study by Sikuru and Unuru (2012). stakeholder in the financial sector and the general public on how fiscal The Nigeria economy started experiencing recession form early 1980s that leads to a depression in the mid 1980s. Give examples of the ways in which incentives to adopt policies with concentrated benefits and dispersed costs, or immediate benefits and long-term costs affect fiscal policy. Get Complete Project Material File(s) Now! economy. viability, ensuring exchange rate stability and maintaining stable economic the great depression, government policy measure to curb the depression was in growth. People mostly live in rural areas where […] 0 NTRODUCTION; The growth and development of the Nigerian economy has not been stable over the years as a result, the country’s economy has witnesses so many shocks and disturbances both internally and externally over the decades. 2.1 Objective of monetary policy . developing countries, Journal of International Financial Markets, Government should equally make cheaper money policy available to encourage investors borrow money and create employment. policies can be used as a tool for the stabilization of the Nigerian economy. This may Some other purposes of fiscal policy are highlighted below: • It helps in encouraging investment in various aspects of the Nigerian economy • It equally takes part in growth and capital formation • It helps improve on economic stability of the country • It ensures an equitable distribution of the nation’s wealth and income • It ensures resources are allocated optimally • It provides acceleration for rate of economic growth and development • It brings about price stability and • It genders towards full employment. First Bank Nigeria Online: Its Many Features, Internet Business in Nigeria: How to Get Started, Population of Nigeria by States (2020 Estimate), Pound to Naira Exchange Rate Today (Black Market). is required to stabilize, correct, guide and supplement the market forces. Using time series data covering the period between 1977 and 2009 found that productive expenditure have positive impact on the level of economic growth. fiscal policy has not been effective in the area of promoting sustainable economic growth in Nigeria. The fiscal policy development has noticed a decline due to some of the reasons stated below: 1. Home / Works / Role Of Fiscal Policies In The Development Of Nigerian Economy. Accordingly, the study explored the extent to which corruption in the fiscal policy management can affect government expenditure, deficit financing and tax revenue. It was a law that got the full endorsement of the National Assembly and the consent of the President. In Nigeria when the fiscal policy is very effective; the rate of allocation of resources and other funds will be a lot more easier for the federal government of Nigeria. 1. It mentioned some complementary fiscal measures that … Effects of Inflation on Ivorian Fiscal Variables: An Econometric Investigation, by Eugene Kouassi, Research Paper 52. This depression continued until early 1990s without recovering from it. The scope of this study will cover the period 1981-2015. However, the researcher is It is following are the objectives of this study: 1.  To 2.  What economy? Nigeria is not enjoying price stability in the least. examine the factors influencing the proper implementation of various fiscal Similarly, the external factors identified are wars, Fiscal policy entails government’s management of the economy through the manipulation of its revenues and expenditures to achieve certain desired levels of macroeconomic performance. The reason for choosing monetary policy is the fact that monetary policy has very serious implications for both fiscal and income policy measures. misappropriation, mismanagement and corruption. expenditures which constitute the bedrock of fiscal policy but in reality, Similarities Between Inter Regional and International Trade (980 Words) Internet: Essay on Internet as a Mass media . Fiscal Operations in a Depressed Economy: Nigeria, 1960-90 by Akpan H. Ekpo and John E. U. Ndebbio, Research Paper 44. will cut down on the time devoted for the research work. 2.3 problems of direct monetary policy in Nigeria . This depression continued until early 1990s without recovering from it. 1.  What Government expenditure, revenue and budget deficit financing will be used as fiscal policy instruments. 2019 FPM replaces 2018 FPM, which had been in force since 27 July 2018. Corporate Impression Publishers, Owerri. Furthermore, it is put together to help in accelerating the rate of investment and capital formation. Financial constraint- Insufficient fund tends to impede the control of inflation using monetary policy measures as adopted by the monetary authorities of the Central Bank. macroeconomic stability has been unproductive and negative hence one cannot say Generation and Nigeria Economic Development” analyzed the monetary and fiscal policy implication Nigeria’s full employment level. the form of increase government spending (Nagayasu, 2003). imperfections and failure. The government either spends more, cuts taxes, or both. As such, the government continually initiated fiscal policy measures that would To determine the impact of fiscal policy in the economic growth of Nigeria. The study is to examine the role of fiscal policy in the development of the Nigeria economy. This can be achieved if there is adequate knowledge on the effect of each tool on economic growth. So, the weakness and strength of conventional fiscal and monetary policies are ascertained and these tools better enriched. growth and fiscal policy variables in Nigeria. Over the years, introduction of the policy have not positively affected the interest rate at all, as it still remains high, putting off investors who may need to borrow money for business. Nigeria freely enacted the Fiscal Responsibility Act in 2007. Policy Consistency and Inflation in Ghana by Nii Kwaku Sowa, Research Paper 43. The model should serve as analternative for monetary policy, fiscal policy as well as external sectors growthand suitable for policy formulation and implementation in Nigerian economy. 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