Nigeria’s Revenue Profile and the Socio-Economic Development Mesh

Abstract

The broad purpose of the research work is to empirically ascertain the web of relationship that exists between Nigeria’s revenue profile and development mesh. It goes further to investigate whether aggregate revenue proxied by various revenue sources such as total federally collected revenue, oil revenue, non-oil revenue, federation account and federal government retained revenue have any significant impact on the overall performance of the Nigerian economy. In order to embark on this exercise, annual time series data from Central Bank of Nigeria and Federal Inland Revenue Service spanning the years (1980-2014) were employed. The Johansen Co-integration test confirmed that a long run dynamic equilibrium relationship exists between economic development and various revenue sources and the Granger Causality result shows that the various revenue sources granger caused economic development in Nigeria. On the basis of our findings and conclusion thereof, and in the light of the need to encourage and promote economic development giving our huge public revenue, the government both at the national and sub-national levels sector should modify the economic policy so as to enhance the revenue generation base for increase economic development. The non-oil sectors should be harnessed to reduce the overdependence on oil and avoid the external shock resulting from the ongoing economic crisis. Government should revise its budgetary system to ensure operational and allocative efficiency.

Keywords: Revenue Profile, Development Mesh, Error Correction Model, Nigeria