ABSTRACT

Nigeria had relatively favourable growth prospects and income levels at the time of independence. However. overtime, economic growth in the country has been dependent on oil revenue and debt due to mismanagement of fiscal policies (Okoh, Oyekwelu & lyidiohi, 2016). When compared \ith emerging economies of Southeast Asian countries, it is obvious and glaring that eConomiL g1O\C[I and development in Nigeria has been lagging behind. The Nigerian economy has been plagued with several challenges over the years. Notable among the challenges is the management and mismanagement of fiscal policies (Ogbole. Amadi & Essi, 2011). in spite of many. and frequent changing of fiscal and other macro-economic policies. Nigeria is yet to tap her economic potentials for rapid economic development and growth. Fiscal policies are extremely linked in macru- economic management; growth in one sector of the economy directly aff'ec erowth in the other Notably, fiscal policy is central to the health of any economy. as governmentS s has power to raise revenue and expend such revenue to meet national needs. These actions affect the disposable income of citizens and corporations which in turn affects the general economy as well (Khalifa. 20 1 6: Omran. 201 7). Fiscal policy has conventionally been associated with the use of taxation revenue and public expenditure to influence the level of economic activities (Abdon, Estrada. Lee & Park. 2014). The implementation of fiscal policy is essentially routed through government's budget. Consequentlw the most important aspect of a public budget is its use as a tool in the management of a nations economy (Jeong. 2014). Fiscal policy as a deliberate action of government involves the use ol government spending. taxation and borrowing to influence the pattern of econom c acli\ uc aud also the level and growth of aggregate demand. output and employment. lhs includes 1IaaHL economic growth. high employment creation and low inflation which is aimed at stabilizing. the economy. Increases in government spending or a reduction in taxes tend to pull the cconornv out 01 a recession: while reduced spending or increased taxes slow down a boom (Dinran. 01 7'c Fiscal policy entails governments management of the economy through the manipulation of its revenue and expenditure to achieve certain desired macroeconomic objectives amongst which is ceunuiLiL growth (Mohanty, 20)2). The objective of fiscal policy is to promote economic conditions conducive to business growth while ensuring that any such government actions are consistent with economic stability.