FISCAL CONSTRAINTS AND ECONOMIC GROWTH IN NIGERIA: ANALYSIS OF OIL AND NON- OIL REVENUE STREAMS

Abstract

Increasing government borrowings is a clear indication that the Nigeria revenue base is low. Hence, this study aims to analyze fiscal constraints and economic growth in Nigeria through the vista of oil and non- oil revenue Streams. Time series data was employed from the period 1981 to 2022 and the data were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin. The model was specified based on the Keynesian growth model with real GDP as the dependent variable while fluctuation in oil and non-oil revenues made up the independent variables. The ARDL technique was deployed to analyze the data. The findings revealed among other things that fluctuations in oil revenue has statistical significant positive impact on the growth of the Nigeria economy in the long-run while fluctuations in non-oil revenue has no statistical significant positive impact on the growth of the Nigeria economy in the long-run. The study therefore concludes that a positive increase in oil and non-oil revenue will cause a positive increase in the growth of the Nigeria economy. Consequently, the need for government to checkmate these fluctuations to the advantage of the economy by ensuring that corruption is reduced to its barest minimum. The diversification of the economy through development of the agricultural and industrial sectors should be advanced with the desired vigour required for sustainable economic growth.