Impact of Government Revenue on Economic Growth in Nigeria

Abstract

The study- “Impact of Disaggregated Government Revenue on Economic Growth in Nigeria (1980-2022)" aims to investigate the impact of government revenue, both oil and non-oil, on economic growth in Nigeria. The study focuses on analyzing the short-run and long-run effects of government revenue on economic growth and determining the magnitude of this effect on economic growth in Nigeria. The research methodology is the ARDL methodology which involves data analysis, correlation studies, stationarity tests, hypothesis testing, cointegration analysis for long-run relationships, estimation of coefficients for short and long runs, stability and diagnostic tests, and interpretation of results. The source of data is the World Bank Development Indicators data base and the Central Bank of Nigeria Statistical Bulletin. The study shows that oil and non-oil revenue have positive impact on economic growth in Nigeria in the long run. It was recommended that the government needs to fashion out sustainable strategies that could boost revenue collection with positive implication for the economy. Appropriate policy mix such as monetary and fiscal policies should be adopted to enhance revenue generation and capital expenditure that would further facilitate economic activities and income generation. The diversification policy of the Nigerian economy should be vigorously and religiously pursued with a view to developing the non-oil sector alongside the oil sector. This will boost all the sectors of the Nigerian economy. Given the significant positive relationship between the oil revenue and non-oil revenue and GDP, the study equally recommends that the government should embark on human capital development programs and acquisition of modern and improved technology that would enhance the productivity of the agencies and personnel in charge of revenue collection.

Key Words: Economic Growth, Oil Revenue; ARDL; Disaggregated

JEL Classification: O40, Q43

DOI: 10.7176/JESD/16-1-08

Publication date: January 30th 2025