Government Revenue and Expenditure in Nigeria: A Bayesian Analysis of Oil and Non-Oil Revenue and Recurrent and Capital Expenditure

References

[1] Akanbi OB (2021). Bayesian regression of government expenditure on revenue in Nigeria. Asian Journal of Probability and Statistics, 15(4), 21–37. https://doi.org/10.9734/ajpas/2021/v15i430361

[2] Akanbi OB (2023). Enhancing Nigerian oil price forecasting: A comprehensive analysis of model averaging techniques. Asian Journal of Probability and Statistics, 25(2), 88–94. https://doi.org/10.9734/ajpas/2023/v25i2555

[3] Central Bank of Nigeria (2025). Statistical bulletin. Central Bank of Nigeria, Abuja.

[4] Dickey DA, Fuller WA (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366a), 427–431. https://doi.org/10.2307/2286348

[5] Dickey DA, Fuller WA (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49(4), 1057–1072. https://doi.org/10.2307/1912517

[6] Gabry J, Simpson D, Vehtari A, Betancourt M, Gelman A (2019). Visualization in Bayesian workflow. Journal of the Royal Statistical Society: Series A (Statistics in Society), 182(2), 389–402. https://doi.org/10.1111/rssa.12378

[7] Gelman A, Carlin JB, Stern HS, Dunson DB, Vehtari A, Rubin DB (2013). Bayesian data analysis, 3rd ed. Chapman & Hall/CRC, Boca Raton.

[8] Goodrich B, Gabry J, Ali I, Brilleman S (2020). rstanarm: Bayesian applied regression modeling via Stan [R package]. https://mc-stan.org/rstanarm

[9] Hoeting JA, Madigan D, Raftery AE, Volinsky CT (1999). Bayesian model averaging: A tutorial. Statistical Science, 14(4), 382–417. https://doi.org/10.1214/ss/1009212519

[10] International Monetary Fund (2025). Nigeria: 2025 Article IV consultation—Press release; staff report; and statement by the executive director for Nigeria. IMF Staff Country Report No. 2025/157. International Monetary Fund, Washington, DC.

[11] International Monetary Fund (2026). Nigeria: 2026 Article IV consultation—Press release; staff report; and statement by the executive director for Nigeria. IMF Staff Country Report No. 2026/125. International Monetary Fund, Washington, DC.

[12] Johansen S, Juselius K (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2), 169–210. https://doi.org/10.1111/j.1468-0084.1990.mp52002003.x

[13] Karlsson S (2013). Forecasting with Bayesian vector autoregression. In: Elliott G, Timmermann A (eds), Handbook of economic forecasting, vol. 2. Elsevier, pp. 791–897. https://doi.org/10.1016/B978-0-444-62731-5.00015-4

[14] Kwiatkowski D, Phillips PCB, Schmidt P, Shin Y (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? Journal of Econometrics, 54(1–3), 159–178. https://doi.org/10.1016/0304-4076(92)90104-Y

[15] National Bureau of Statistics (2024). Federation Account Allocation Committee (FAAC) reports. National Bureau of Statistics, Abuja.

[16] Ogujiuba K, Abraham TW (2012). Testing the relationship between government revenue and expenditure: Evidence from Nigeria. International Journal of Economics and Finance, 4(11), 172–182. https://doi.org/10.5539/ijef.v4n11p172

[17] Phillips PCB, Perron P (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335–346. https://doi.org/10.1093/biomet/75.2.335

[18] Vehtari A, Gelman A, Gabry J (2017). Practical Bayesian model evaluation using leave-one-out cross-validation and WAIC. Statistics and Computing, 27, 1413–1432. https://doi.org/10.1007/s11222-016-9696-4

[19] Vehtari A, Gelman A, Simpson D, Carpenter B, Bürkner P-C (2021). Rank-normalization, folding, and localization: An improved R̂ for assessing convergence of MCMC. Bayesian Analysis, 16(2), 667–718. https://doi.org/10.1214/20-BA1221

[20] Zeugner S, Feldkircher M (2015). Bayesian model averaging employing fixed and flexible priors: The BMS package for R. Journal of Statistical Software, 68(4), 1–50. https://doi.org/10.18637/jss.v068.i04

[21] Zivot E, Andrews DWK (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 10(3), 251–270. https://doi.org/10.2307/1391541

@article{1724815,
      author = {John Abisi Daniel, M. U. Bawa, A. Ahmed},
      title = {Government Revenue and Expenditure in Nigeria: A Bayesian Analysis of Oil and Non-Oil Revenue and Recurrent and Capital Expenditure},
      journal = {Iconic Research And Engineering Journals},
      year = {2026},
      volume = {10},
      number = {5},
      pages = {1088-1121},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1724815.pdf},
      abstract = {This study examined the relationship between government revenue and government expenditure in Nigeria, focusing on the effects of oil and non-oil revenue on recurrent and capital expenditure. It extended Akanbi (2021) by applying a Bayesian framework that accounts for parameter and model uncertainty. Secondary fiscal data from the Central Bank of Nigeria Statistical Bulletin and other official sources were analyzed using descriptive statistics, stationarity and cointegration diagnostics, Bayesian linear regression, posterior inference, MCMC diagnostics, posterior predictive checks, Leave-One-Out cross-validation and Bayesian Model Averaging. The results indicate positive associations between revenue and expenditure, with differences across expenditure components. For recurrent expenditure, non-oil revenue showed a strong positive relationship, while the evidence for oil revenue was less certain. For capital expenditure, both oil and non-oil revenue showed positive and credible relationships, with non-oil revenue having the larger posterior mean. Bayesian Model Averaging further indicated stronger support for non-oil revenue in recurrent expenditure and strong support for both revenue sources in capital expenditure. The study highlights the importance of sustainable domestic revenue mobilization and improved expenditure management for fiscal sustainability in Nigeria.},
      keywords = {Government revenue; government expenditure; oil revenue; Bayesian regression; Bayesian model averaging; Nigeria},
      month = {November},
  }