ABSTRACT
This research work focus on econometric analysis of the
impact of fiscal policy on Nigeria economy. The major objective is to identify
the contribution of fiscal policy to Nigeria economic. Regression analysis was
used in the cause of this study. Model was formulated to know the relationship
between fiscal policy instrument and economic growth in Nigeria. Secondary data
was used to ascertain the correlation between the gross domestic product and
fiscal policy instrument.
The study discovered that gross domestic product have a
significant relationship with fiscal policy instrument in Nigeria. And that, general
price level, money supply and government expenditure contribute immensely to economic development of
Nigeria. It's therefore pertinent that government should formula
appropriate fiscal policy that will regulate price level, money supply and
government expenditure In other to enhances economic
development in Nigeria.
TABLE OF CONTENT
Title Page
Certification
Dedication
Acknowledgement
Abstract
Table of Content
CHAPTER ONE:
BACKGROUND OF THE STUDY
1.1 Background of
the Study
1.2 Statement of
Problem
1.3 Aim and
Objectives of the Study
1.4 Research
Questions
1.5 Research
Hypotheses
1.6 Research
Methodology
1.7 Significance
of the Study
1.8 Scope and
Limitation of the Study
1.9 Definition of
Terms I Concept
1.10 Organization of
the Study
CHAPTER TWO:
LITERATURE REVIEW
2.1 Introduction
2.2 Concept and
Definition of Fiscal policy
2.3 Meaning and
definitions of Inflation
2.3.1 Effect of
Fiscal Policy in Controlling Inflation in Nigeria
2.4 Problems and
Challenges of Fiscal Policy in Nigeria
2.5 Prospects and
Solution to Fiscal Policy in Nigeria
CHAPTER THREE:
THE STRUCTURE OF CAPITAL MARKET IN NIGERIA
3.1 Introduction
3.2 Intergenerational
Equity and Fiscal Sustainability
3.3 Macroeconomic
Management and Fiscal Planning
3.4 Fiscal policy
and the Real Economy
3.5 Constraints on
Monetary Policy in Tackling Inflation
3.6 Options to
Migrate Conflicts between Competing
Fiscal
Objectives
3.7 Improving the
Structure of Public Spending
3.8 Optimizing the
Phrasing of Public Spending
3.9 Tightening
Monetary Policy
CHAPTER
FOUR: RESEARCH METHODOLOGY, DATA
ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Methodology
4.2 Methods of
Estimation of Analysis
4.3 Model
Specification
4.3.1 Econometric
Model Specifications
4.3.2 A Priori
Expectation
4.4 Specification
of Data
4.4.1 Data for
Regression Analysis
4.5 Empirical
Results and Interpretation of the
Regression Result
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION
AND
RECOMMENDATION
5.1 Summary of
Findings
5.2 Recommendation
5.3 Conclusion
Bibliography
Appendix
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The economic policy of any country, be it developed,
developing, even the underdeveloped countries requires some set of fundamental
goals and objectives. Any attempt to undermine these presupposed fundamental
aims, will in no small measure contribute to little or no tangible success
achieved by the economy of the said country a However, proper developmental
policies coupled with some set of targets formulated and well-implemented
guarantees balanced and steady growth of the economy which consequently reflects
positive changes in the social, cultural, political and economical lives of the
people. It is worthy of note to say, that the emphasis given to the aims and
objectives predetermined to be achieved, varies from country to country, but
all will be included in the overall economy policies of the concerned country.
Although, there are various policies or means by which
government tends to restructure, re-direct and maintain the continuous and
steady growth development in the economy. The commonest among those policies
are fiscal policy, Exchange rate policy, External trade policy, monetary
policy, External debt management policy, public sector reform policy etc.
For the purpose of this research work, emphasis is placed
to limit the study only on fiscal policy and its effects on real sector. Fiscal
policy refers' to the manipulation of expenditure resources and taxation power
by the government for the purpose of managing the economy. It is a measure on
combination of measures designed to adjust and control the economy by
regulating taxes and government finance.
The fiscal policies objectives are however achieved
through various means. These means range from reduction in government and
operating a budget surplus for effect if the federal budget is balanced increase or
decrease in taxation, internal and external borrowing, printing money"
drawing from the country's past reserve and so on. This is aimed at influencing
economic activities in a desired direction and to achieve some specified
macro-economic policy objectives. For the purpose of this research work,
emphasis is placed to limit the study only on fiscal policy and its effects on
real sector.
1.2 STATEMENT OF PROBLEM
It is an undisputable fact that the main objectives of any
country is to achieve growth in the real sector which transcend into
improvement in the standard of living of the people. To this end, efforts are
made to maintain effectiveness of its fiscal policy. This study, however, seeks
to address the effect of fiscal policy on Nigeria economy and how it has
enhanced development of Nigeria economy.
1.3 AIM AND OBJECTIVES OF THE STUDY
The purpose of the study is to determine the impact of
fiscal policy on Nigeria economy.
1.
To examine impact of
fiscal policy on the general prices level
2.
To determine effect
of fiscal policy on the level of money supply
3.
To exchange the role
of fiscal policy on the government expenditures
1.4 RESEARCH QUESTION
In order to achieve the objective of this research study,
the research study will attempt to provide answers to the following research
questions.
§ To what extent is fiscal policy implementation have been
able to affect the economy of Nigeria?
§ Does the fiscal policy affect the level of money supply?
§ To what extent is time lag in fiscal policy implementation
detrimental in affect the real sector in Nigeria?
§ What are the best way in which the fiscal policy
implementation will affect the real sector economy positively?
1.5 RESEARCH HYPOTHESIS
1. Ho:
there is no significant relationship between fiscal policy
on the general price level
Hi: there is significant relationship between fiscal policy on
the general price level
2. Ho:
there is no significant relationship between fiscal policy
and money supply
Hi: there is significant relationship between fiscal policy
and money supply
3. Ho:
there is no significant relationship between fiscal policy
and the government expenditure
Hi: there is significant relationship between fiscal policy
and the government expenditure
1.5 RESEARCH METHODOLOGY
The research method to be used is the econometrics
analysis to test for the relationship between dependent and independent
variables. This will involve multiple regression analysis. Secondary data will
be employed which is sources through CBN publication F.O.S e.t.c the model
specification are as follows;
:. GDP = = bo + blPRC
+ b2xMSC + b3GEX
+ b4TAX+ u
Where,
Y= GDP (Gross Domestic
product at market price); Dependent variable.
X1
= Price
level: Independent variables
X2 = Money supply; Independent variables
X3 = Government expenditure: Independent variable
X4 = Tax: Independent variable
bo = constant term
b1 = Coefficient of parameter X1
b2 = Coefficient of parameter X2
b3 = Coefficient of parameter X3
b4 = Coefficient of parameter X4
u = Error of stochastic term
SOURCES OF
DATA:
For the purpose of this research, Secondary data will be
utilized which will cut across 30 years i.e. from 1980 to 2009, the major
sources of data and information will be from Central Bank of Nigeria (CBN) various publications
and statically bulletin of ministry of finance.
1.7 SIGNIFICANCE OF THE STUDY
It is never an overstatement to say that fiscal policy is
one of the most effective policy measures used in directing an economy.
However, the main significance of this study is that, the research work after
completion will be useful to individuals, firms, parastatals and the Nigerian
economy in its entirety.
1.8 SCOPE AND LIMITATION OF THE STUDY
Scope: The study will cover the trend in debt procurement from
time to time of oil boom of the 1980's to 2009. The study will also cover
consequences of debt on the economy as well as debt management strategies that
have been used by debt manager, their failure and further recommendations. The
study will likewise cover some growth theories in explaining the concept of
economic growth. Furthermore, the
problem of fiscal policy will also be reviewed in the study.
Limitation: this study is limited to Nigeria economic alone. Also
20year data will used to really know the effect of fiscal policy on Nigeria economic on the economic and how it has enhanced
the economic development.
Time & Cost: Is very precious, this study will be limited to available
information within the reasonable time also the problem of finance in. this
regard.
1.9
THE DEFINITION OF TERMS/CORCEPT
GDP-Gross Domestic Product
CBN-
Central Bank of Nigeria Statistical Bulletin
F.O.S- Federal Office of Statistic
1.10 OROABIZATIOR
OF THE STUDY
This study will comprise of five chapters. Chapter one
will be the introduction part which will comprise of what exactly the topic is
about. Chapter two will be the literature review to show the difference and
diversity of view on e subjects and to act as a guide, Chapter three will
consist of structural composition of the effectiveness of fiscal policy of
Nigerian economy. Chapter four will illustrate the research methodology. Data
analysis and interpretation of the results. Chapter five, summarizes the findings,
recommendation and conclusion.
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