An Empirical Study Of The Impact Of Fiscal Policy On Public Consumption And Expenditure In Nigeria 1975 – 2005

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An Empirical Study Of The Impact Of Fiscal Policy On Public Consumption And Expenditure In Nigeria 1975 – 2005

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PROJECT TOPIC AND MATERIAL ON AN EMPIRICAL STUDY OF THE IMPACT OF FISCAL POLICY ON PUBLIC CONSUMPTION AND EXPENDITURE IN NIGERIA 1975 – 2005

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  • Name: An Empirical Study Of The Impact Of Fiscal Policy On Public Consumption And Expenditure In Nigeria 1975 – 2005
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CHAPTER ONE

1.1  INTRODUCTION

The   structure  of  the Nigerian  economy  has been    involving  since  the nation   was   put  together  by British  in  the   early  part of  this century.  Prior   to  the  second   world   war,   the   Nigerian  economy  was   solely   based on   Agriculture   with little emphasis  on  export.

After independence from the British, the economy   took   a spiral leap towards development. Many   structures  were  put   in  place  by  the  government of   the  day  to turn   the  economy  around . One of   these was   the Structural Adjustment Programme of 1986.

Prior to  independence, the  Nigerian  economy    was   characterized  by under – development, dualistic tendencies   and   un-organization.  (Itoha, Itsede, 2003).

There  has been  concerned  effort  by  various government   in   Nigeria   to develop  and  regulate  the economy.  And   one of   the   tools used  by  the government is its   fiscal   and  monetary   policies.

Monetary policy  is  a tool employed  by government   to   achieve internal  and external balance.  It is a  macroeconomic  tool.

Fiscal policy involves  the  use of  government budget   to   influence   the   level  of   economic  activities ( Itoha,   Oyefusi, Otiakhi, 2003).

For the  purpose of   this   project, our emphasis will  be   on   fiscal  policy  and   it’s  effect  on  public consumption   expenditure.

Fiscal  policy refers   to   the   use   by   government of   it’s   expenditures   and   taxes   to  influence   the  level of   aggregate   demand   in   the economy.  Government expenditure   in   the   economy   constitute   an   injection into  the   economy  while   taxes  serves   as   leakages  out   of   the  flow  of   economic   activities  and   Income. w.w.w.wikepedia .com / finance.

Government expenditure in   the economy has varied   over   the  years.  In  the  years  1975 – 1992, Government   expenditure   share  in  the  country’s Gross domestic   product (GDP)   has   been 1975 60.5%)  1978 (18.4%)  1992  (31.8%) selectively. In  1997, it  was  17.6%. This   low  percentage  in  1997 may  be  due  to Military   interference   in   the   government.

The   higher the   percentage, the  higher  the  level of   public  expenditure  on consumption.

The  fiscal policy  of  any country  has  a  big  role  to play  in  public  expenditure  on  consumption.

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