Gold Open Access

Fiscal Stability and Inclusive Growth in Nigeria

(1) * Anu K. Toriola Mail (Hallmark University, Ijebu-Itele, Nigeria)
(2) Felix Aberu Mail (Tai Solarin University of Education, Ijagun, Ogun State, Nigeria)
(3) Salami O. Amusa Mail (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)
(4) Oluwatoba O. Adeniwura Mail (Olabisi Onabanjo University, Ago-Iwoye, Nigeria)
(5) Babajide H. Mustapha Mail (Federal College of Animal Health and Production Technology, Moor Plantation, Ibadan, Nigeria)
*Corresponding author


In Nigeria fiscal stability has deteriorated resulting in high rate of deficits and domestic debt. This study investigates fiscal stability and inclusive growth in Nigeria using annual data from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1985 to 2015. The result Autoregressive Distributed Lag (ARDL) estimation technique used in the study showed that in the short run debt ratio and inflation have a significant negative effect on inclusive growth in Nigeria. However, in the long-run, debt ratio have a significant negative effect on inclusive growth. Fiscal deficit and inflation have a significant positive effect on inclusive growth. The Granger causality test shows a uni-direction causality relationship between inclusive growth and fiscal stability measures running only from debt ratio and fiscal deficit to inclusive growth. It is evident from the result that fiscal stability in Nigeria is characterised by policy inconsistency and high level of macroeconomic uncertainty indicating high level of fiscal instability. It was suggested that government need to reduce the size of its deficits, broaden the revenue base by increasing the contribution from non-oil sources.


Fiscal; Stability; Inclusive; Growth; Nigeria



Article metrics

Abstract views : 350 | PDF views : 254




Full Text



Adeoye, T. (2011). Fiscal policy and growth of the Nigerian economy: An empirical perspective. Nigerian Institute of Social and Economic Research Monographs.

Ali, I. & Son, H.A. (2007). Defining and Measuring Inclusive Growth: An Application to the Philippines’. Economics and Research Development (ERD) Working Paper Series No. 98. Asian Development Bank pp 1-45.

Aso, Y. (2013) Sustainability of Budget Deficits. Policy Research Institute, Ministry of Finance, Japan, Public Policy Review, 9(4), 1-13

Ayinde, T.O (2014) Sustainable Fiscal Management in Nigeria – A Triangulation Analysis Journal of Economics and Development Studies, 2(2), 271-295.

Cajner, T. (2005) Cyclically Adjusted Budget Balances in Slovenia, Prikazi in analize XII/2 (november 2005), Ljubljana.

Çebi, C, & Özlale, U. (2011) Structural Budget Balance and Fiscal Stance in Turkey, Central Bank of the Republic of Turkey 2011.

Çebi, C. & Ü. Özlale (2012), "Türkiye’de Yapısal Bütçe Dengesi ve Mali Duruş", İktisat İşletme ve Finans, 27(310), 9-38.

Hall, R.E (2013) Fiscal Stability of High-Debt Nations under Volatile Economic Conditions, German Economic Review 15(1): 4–22.

Idris, M & Bakar, B (2017) Fiscal operations and macroeconomic growth: The Nigerian experience, International Journal of Social and Administrative Sciences, 2(1), 31-44.

Kakwani, N., & M. Krongkaew, (2000). Analysing poverty in Thailand. Journal of Asia Pacific Economy 5(1,2), 141-60.

Klasen, S. (2010). Measuring and Monitoring Inclusive Growth: Multiple Definitions, Open Questions, and Some Constructive Proposals. ADB Sustainable Development Working Paper Series No. 12.

Kolawole, B.O (2016) Government Spending and Inclusive-Growth Relationship in Nigeria: An Empirical Investigation, Zagreb International Review of Economics & Business, 19(2), 33-56.

Kumah, F.Y & Sandy, M. (2013) In Search of Inclusive Growth: The Role of Economic Institutions and Policy, Modern Economy, 2013, 4, 758-775.

Makrydakis, S., Tzavalis, E., & Balfoussias, A. (1999). Policy regime changes and the long-run sustainability of fiscal policy: An application to Greece. Economic Modelling, 16, 71–86.

Mankiw, N.G., Romer, D. & Weil, D.N (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics 107(May):407-437.

McKinley, T. (2010). Inclusive growth criteria and indicators: an inclusive growth index for diagnosis of country progress. Asian Development Bank’s Sustainable Development 14: 1-20.

Mordi, C.N.O, Adebiyi, M.A, Adenuga, A.O, Musa, A.U, Abeng, M.O, Ikenna-Ononugbo, A.U, Adeboye, A.A,. Adamgbe, E.T & Evbuomwan, O.O (2013). Modeling the fiscal Sector of the Nigerian economy, Central Bank of Nigeria.

Ogbole, O. F., Amadi, S. N. & Essi, I. D. (2011). Fiscal Policy: Its impact on Economic.

Growth in Nigeria (1970 – 2006). Journal of Economics and International Finance, 3(6): 407- 417.

Oyeleke O.J. & Ajilore, O.T. (2014). Analysis of Fiscal Deficit Sustainability in Nigerian Economy: An Error Correction Approach, Asian Economic and Financial Review, 2014, 4(2):199-210 University of Cape Town, South Africa.

Suryanarayana, M.H. (2013). "What is Inclusive Growth? An Alternative Perspective," One Pager 205, International Policy Centre for Inclusive Growth.

Tapsoba, R. (2012). Do National Numerical Fiscal Rules really shape fiscal behaviours in developing countries? A treatment effect evaluation. Economic Modelling, 29(4), 1356-1369.

Tujula, M. & Wolswijk, G. (2004). What determines Fiscal balances? An empirical Investigation in Determinants of Changes in OECD Budget balances, Working Paper Series NO. 422 / December 2004.

Uduakobong, S.I. (2015). Poverty alleviation strategies in Nigeria: A Call for an inclusive growth approach. Journal of Poverty, Investment and Development, 15(1), 110-118.


  • There are currently no refbacks.

Copyright (c) 2022 Anu K. Toriola, Felix Aberu, Salami O. Amusa, Oluwatoba O. Adeniwura, Babajide H. Mustapha

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.