The Assessment of impact of Monetary and Fiscal Policy on Investments in Nigeria

Ibrahim Danlami Mohammed, Yakubu Muhammad Sanusi and Ibrahim Dikko Mustapha
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Ibrahim Danlami Mohammed: Monetary Policy Department, Central Bank of Nigeria – Abuja
Yakubu Muhammad Sanusi: Monetary Policy Department, Central Bank of Nigeria – Abuja
Ibrahim Dikko Mustapha: Monetary Policy Department, Central Bank of Nigeria – Abuja

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 11, 2707-2716

Abstract: This study assessed the interference of monetary and fiscal policy on investments in Nigeria by applying Error Correction Model using quarterly data from 2010Q1 to 2022Q4. The results show that exchange rate, government expenditure, money supply monetary policy rate, and public debt have both short-run and long-run relationships with investment in Nigeria, while government revenue is probably due to multiple taxes which exist in the economy only has a negative and insignificant relationship with investment in Nigeria, particularly in long run. Based on the above findings, the paper recommends that the monetary authorities should find and adopt an optimum monetary policy rate that would be conducive and encourage investment in the country. The fiscal authority should review the multiple taxes charged on businesses to encourage more investment into the economy.

Date: 2024
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