An Assessment of Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017)
Keywords:
Budget, Budget Deficit Financing, External Sector Performance, Net TradeAbstract
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 evaluating the 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 the study 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.
References
Ali, S. A. (2014). The Impact of Public Expenditures on Economic Growth in Jordan. International Journal of Economics and Finance. Vol. 6 (10), 157-167. http://dx.doi.org/10.5539/ijef.v6n10p157.
Bakare, I.A.O, Adesanya, O. A. & Bolarinwa,S. A. (2014). Empirical Investigation between Budget Deficit, Inflation and Money Supply in Nigeria. European Journal of Business and Social Sciences. Vol. 2(12), 120-134, https://www.researchgate.net/publication/326897213_ The_Impact_of_Budget_ Deficits_on_Inflation_in_Zambia
C.B.N. Bulletin Explanatory Notes, (2017). Central Bank of Nigeria Statistical Bulletin. https://www.cbn.gov.ng/Out/2019/STD/2018%20Statistical%20Bulletin_Explanatory%20Notes.pdf
Ehinomen C.O. & Ugwu I. (2017). The Relationship between Budget Deficit, Inflation and Money Supply Growth in Nigeria, From 1970- 2014. International Journal of Innovative Research and Advanced Studies (IJIRAS). Vol. 4(3). http://www.ijiras.com/2017/Vol_4-Issue3/ paper2.pdf
Eze, O.R & Ogiji, F.O. (2016). Impact of Deficit Financing on Economic Stability in Nigeria: Analysis of Economic Growth. Journal of Applied Finance & Banking. Vol. (6) (1), ISSN: 1792-6580 (print version), 1792-6599 (online). Scienpress Ltd. https://studylib.net/doc/13728184/6--111-125-issn--1792-6580--print-version---1792-6599--on.
Fagbohun A. (2017). The Economic Performance of Budget Deficit in Nigeria. Research Journal of Finance and Accounting. Vol. 8 (8). URL: https://pdfs.semanticscholar.org/e3c8/ 1a799cbdf9d94d7802ba5924dcdee7120f42.pdf
Fasoranti M.M. & Amasoma D. (2013). Analysis of the Relationship between Fiscal Deficits and External Sector Performance in Nigeria. Journal of Economics and Sustainable Development. Vol.4 (11). URL: https://www.iiste.org/Journals/index.php/JEDS/article/viewFile/6847/6956
Jhingan M.L. (2013). Money, Banking, International Trade and Public Finance. Delhi, India: Vrinda Publication (P) Limited.
Keho Y. (2010). Budget Deficits and Economic Growth: Causality Evidence and Policy Implications for WAEMU Countries, European Journal of Economics, Finance and Administrative Sciences, 18:99-104.
Keynes J. M. (1936). The General Theory of Employment, Interest and Money. London and New York: Macmillan. www.hetwebsite.net/het/texts/keynes/gt/gtcont.htm
Momanyi S. O., Lucas G., O., & Alia O. F. (2013). The Relationship between Fiscal Deficits and Economic Growth in Kenya: An Empirical Investigation. Greener Journal of Social Sciences. Vol. 3(6), 306-323. https://www.academia.edu/37515859/Econometric-Analysis-of-FiscalPerformance-In-Kenya.pdf
Momodu A. & Monegbe T.G. (2017). Budget Deficit and Economic Performance. Saudi Journal of Business and Management Studies. URL: http://scholarsmepub.com/wp-content/uploads/2017/04/SJBMS-23B312-321-r.pdf
Muhammad K. T., Sofia A., Syed H. Z. & Abbas K. (2014), Effect of Budget on Trade Deficit in Pakistan: A Time Series Analysis. Journal of Finance and Economics. Vol. 2(5), 145-148. www.sciepub.com/JFE/abstract/1986
Ojong, C. M., Owui, H.O., & Effiong, C. (2013). Effect of Budget Deficit Financing on the Development of the Nigerian Economy: 1980-2008. European Journal of Business and Management. Vol. (5) (3). https://www.iiste.org/Journals/index.php/EJBM/article/view/4445
Okoro A. S. (2013). Deficit Financing and Trade Balance in Nigeria. International Journal of Accounting Research. Vol. 2(1), 49-54. www.arabianjbmr.com/pdfs/AC_VOL_1_2/5.pdf
Okpanachi U.M and Abimiku C.A. (2007). Fiscal Deficit and Macroeconomic Performance: A Survey of theory and Empirical Evidence- in Ogiji P.Ed. The Nigerian Economy: Challenge and Directors for Growth in the Next 25 Years, Makurdi, Aboki publishers
Olofin S. (2001). An Introduction to Macroeconomics. Ikeja, Lagos: Malthouse Press Limited.
Uduakobong S. I. (2014). An Empirical Investigation of the Relationship between Money Supply and Inflation in Nigeria (1970-2011). International Journal of Humanities Social Sciences and Education (IJHSSE) Volume 1(12). URL: https://www.arcjournals.org/pdfs/ijhsse/v1-i12/9.pdf
Usher, A. (1998). Public Expenditure and Economic Growth in Nigeria. Department of Economics, University of Ilorin, Ilorin, Nigeria. https://www.researchgate.net/publication/227368247_ Public_Expenditure_And_Economic_Growth_In_Nigeria
