The Fundamentals of Fiscal Deficits and Macro-economy in Nigeria

Monogbe Tunde G., Harry, A. Jones and Achugbu Austin

Abstract This study empirically examined the response of macroeconomic performance indices to government fiscal deficits in Nigeria using three different models. This study covers for 19years (1997-2016) been the years of consistent trend of fiscal deficits in Nigeria. Findings reveal that macroeconomic performance indices captured in this study react to government fiscal deficits in anassorted manner and as such government fiscal deficits has not really guarantee macroeconomic stability in Nigeria as the report shows its ephemeral contribution to the economy. Hence, this study recommends that borrowed fund should be adequately utilisedin capital projects which is capable of yielding better returns and the omnibus pattern of spending in the legislative arm of the government should be reviewed downward.