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Public Expenditure, Tax Revenue and Fiscal Deficits in Nigeria
Subject area: Science,Engineering and Technology · Area of research: Economics
Abstract
The study investigated Public Expenditure, Tax Revenue and Fiscal Deficits in Nigeria. Data from 1981 to 2023 was used in the study. The error correction mechanism was employed in the study. The result showed that in the longrun public expenditure has a positive and significant impact on fiscal deficit. Tax revenue has a negative and significant impact on fiscal deficit. In the shortrun both public expenditure and tax revenue has negative impact on fiscal deficit, although only tax revenue is statistically significant. The error correction term is negatively sign and statistically significant. The study recommend therefore that government should broaden the tax base, improve efficiency in tax collection, and minimize leakages through digital tax administration and stronger enforcement mechanisms. The government should prioritize productive and capital expenditures that yield long-term economic growth rather than recurrent expenditures that largely widen fiscal deficits. Strict monitoring of budget implementation will also help in ensuring efficiency and value for money. Strong institutional frameworks should be established to ensure transparency in public expenditure. Reducing wasteful spending, corruption, and mismanagement will help curb the widening fiscal deficit.
Keywords
Public Expenditure, Tax Revenue, Fiscal Deficits, ECM.
References
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How to cite this paper
@article{1711500,
author = {Ibori Uruemu Helen (PhD), Eshenake Samuel Jimoh (PhD)},
title = {Public Expenditure, Tax Revenue and Fiscal Deficits in Nigeria},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {9},
number = {4},
pages = {1629-1635},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1711500.pdf},
abstract = {The study investigated Public Expenditure, Tax Revenue and Fiscal Deficits in Nigeria. Data from 1981 to 2023 was used in the study. The error correction mechanism was employed in the study. The result showed that in the longrun public expenditure has a positive and significant impact on fiscal deficit. Tax revenue has a negative and significant impact on fiscal deficit. In the shortrun both public expenditure and tax revenue has negative impact on fiscal deficit, although only tax revenue is statistically significant. The error correction term is negatively sign and statistically significant. The study recommend therefore that government should broaden the tax base, improve efficiency in tax collection, and minimize leakages through digital tax administration and stronger enforcement mechanisms. The government should prioritize productive and capital expenditures that yield long-term economic growth rather than recurrent expenditures that largely widen fiscal deficits. Strict monitoring of budget implementation will also help in ensuring efficiency and value for money. Strong institutional frameworks should be established to ensure transparency in public expenditure. Reducing wasteful spending, corruption, and mismanagement will help curb the widening fiscal deficit.},
keywords = {Public Expenditure, Tax Revenue, Fiscal Deficits, ECM.},
month = {October},
}