ABSTRACT

The study provided an empirical analysis of the effect of fiscal policy on investment expenditures in Nigeria using time series data from 1999 to 2016 collected from the Central Bank of Nigeria statistical bulletin and the National Bureau of Statistics. Fiscal policy was measured by government total tax revenue and government total expenditures. The ordinary least squares (OLS) method of multiple regression was utilized in analyzing the log-linearized model. The findings were that, government total revenue and government total expenditure jointly explained about 94% of the total variations in investment expenditures as shown by the adjusted R-squared. The F-statistic showed that the joint effect of tax revenue and government expenditure was significant in affecting investment expenditures in Nigeria. Specifically, tax revenue and government expenditures had positive and significant effect on investment expenditures over the period of study. Consequently, it was recommended that government funds should be channeled towards provision of critical infrastructure so as to provide the enabling investment environment.