Disaggregated Fiscal Operations and External Sector Growth in Nigeria

Abstract

This paper investigates the link between fiscal operation variables and external sector performance of the Nigeria economy for the period 1992- 2021. The expost facto research design was adopted and annual data collected from the CBN Statistical Bulletin were analyzed using the Ordinary Least Square techniques to ascertain the relationships between fiscal operations variables (government expenditure, government revenue and government debts) and external sector variables (balance of payments, exports and external reserves). The empirical results of the study reveal that exports and external reserves have positive relationship with government expenditure and revenue but inverse relationship with government debts. Balance of payments also has positive relationship with government revenue and government debts but inverse relationship with government expenditure. The study recommends that government should reappraise its fiscal policy strategy particularly the actual aggregate expenditure, so as to address the persistent unfavourable balance of payments vis a vis the negative link with government expenditure.

Keywords

• Fiscal operations
• external sector
• external reserves
• balance of payments
• exports

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