FISCAL POLICY AND THE PERFORMANCE OF PRIVATE SECTOR IN NIGERIA

Abstract

The research looks at the performance of Nigeria's private sector from 1993 to 2022 in relation to fiscal policy. The CBN bulletin, 2022, is the source of secondary data. This research uses four different variables. Tax, recurring expenditure, and capital expenditure are the explanatory factors, while private sector output serves as a stand-in for the health of the private sector economy and is the dependent variable. We use time-series econometric models to construct and test hypotheses. The result verifies that the short-run correction speed from the long-run disequilibrium is around 66%. According to the research, capital investment and private sector production in Nigeria are significantly correlated. In Nigeria, there is a strong correlation between taxes and the production of the private sector. It was found that there is a strong correlation between recurring expenses and private sector production in Nigeria. According to the coefficient of determination, modifications to Nigeria's fiscal policy variables may account for almost 60% of fluctuations in the country's economic development. The research findings indicate that there exists a noteworthy correlation between fiscal policy and the expansion and advancement of the Nigerian economy. The report suggests shifting more resources to the economy's productive sectors and raising and maintaining expenditure in these areas. According to the report, the Nigerian government had to cease its unrelenting, inefficient external borrowing, wasteful expenditure, and unrestrained money supply. The government needs to implement targeted measures meant to attain more robust and long-term economic expansion and advancement.