Fiscal Policy and Nigeria's Economic Growth

This study examined the impact of fiscal policy on Nigeria’s economic growth, with specific objectives of determining the effects of government expenditure, government revenue, and public debt on gross domestic product. The research covered a 30-year period (1994-2023) and adopted an ex post facto research design, relying solely on secondary data obtained from the Central Bank of Nigeria, the National Bureau of Statistics, and the World Bank. The study population comprised key fiscal indicators influencing national output, and the sample size consisted of 30 annual observations. The Ordinary Least Squares estimation technique was employed using E-Views 13, supported by diagnostic tests to ensure statistical reliability. Descriptive statistics revealed high volatility in expenditure and debt, while unit root tests confirmed that the variables were integrated of order one, I(1). The regression analysis showed that government expenditure (β = 16.55, p = 0.0000) had a significant positive effect on economic growth, government revenue (β = 0.74, p = 0.5324) had an insignificant positive effect, and public debt (β = -1.47, p = 0.0522) had a negative but weakly significant effect. The model exhibited strong explanatory power with an R² of 0.9616 and F-statistic probability of 0.0000, confirming the model’s overall significance. Expansionary government expenditure enhances growth, whereas inefficient revenue mobilization and unsustainable debt hinder economic performance. The study recommended that government expenditure should be strategically directed toward productive sectors, such as infrastructure, education, and health, to ensure sustainable growth and fiscal stability.