An Assessment of Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017)

Ajayi S.O. Author-Workplace- Department of Banking and Finance, Kogi State University, Nigeria., Modeyin F. and Nwankwo O. Author-Workplace- Department of Banking and Finance, Kogi State University, Nigeria.
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Modeyin F.: Department of Banking and Finance, Kogi State University, Nigeria.

Indian Journal of Commerce and Management Studies, 2019, vol. 10, issue 3, 01-15

Abstract: This paper assessed Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017); the general objective of the study is to assess Budget Deficit Financing of Nigeria in the context of her performance in the External Sector while the specific objective is tied to evaluatingthe implications of Budget Deficit Financing on Nigeria’s Net Trade and Foreign Direct Investment. The ADF unit root test and the Autoregressive Distributed Lag (ARDL) models were used as the estimation techniques of the data analysis. The findings of thestudy showed that 78% of the total variation in Nigerian Net Trade (NT) resulted from the explanatory variables (DFB and FDI) included in the model and conclude that: Budget Deficit Financing (DBF) has insignificant positive impact on the Nigerian External Sector Performance during the period reviewed, and that, FDI’s impact is significant and positive on the Nigeria’s External Sector Performance during the period reviewed. Hence, we recommend that government should focus on fiscal and monetary policies that will enshrine fiscal discipline for at levels of government and its agencies.

Keywords: Budget; Budget Deficit Financing; External Sector Performance; Net Trade. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:aii:ijcmss:v:10:y:2019:i:3:p:01-15

DOI: 10.18843/ijcms/v10i3/01

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