Fiscal Policy and Human Development in Nigeria (1986-2017)

Okere P.A. Ph.D, Uzowuru L.N Ph.D and Mbaeri C.C. Ph.D
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Okere P.A. Ph.D: Department of Banking and Finance, Imo State Polytechnic, Umuagwo-Ohaji, Nigeria
Uzowuru L.N Ph.D: Department of Banking and Finance, Federal Polytechnic, Nekede Imo State, Nigeria
Mbaeri C.C. Ph.D: Department of Banking and Finance, Imo State Polytechnic, Umuagwo-Ohaji, Nigeria

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 5, 545-553

Abstract: This study examined the effect of fiscal policy on human development in Nigeria using time series annual data from 1986-2017. The study used secondary data sourced from the Central Bank Nigeria annual statistical bulletin, World Development Indicator and Federal Inland Revenue Service publications. Fiscal policy instruments were proxied by government recurrent expenditure (GRE), government capital expenditure (GCE) and tax revenue (TRV) while human development was proxied by Human Development Index (HDI). The data were analyzed using Autoregressive Distributed Lag (ARDL) which revealed that all the series were stationary and adequately cointegrated. The study revealed a positive and significant relationship between fiscal policy and Human development in Nigeria. The study also found that recurrent expenditure exerts positive relationship while the capital expenditure exerts positive but insignificant relationship. The tax revenue reveals negative though insignificant relationship also. The study recommends that government should restructure its revenue base to finance fiscal policy expansion rather than embarking on external borrowing. This can be achieved by improving its revenue sources and efficient pursuit of tax reforms which will help to minimize tax avoidance, diversion and invasion. Again, government fiscal policies should place greater emphasis on the principles of effective taxation aimed at promoting investment and the growth of the human development.

Date: 2022
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