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.

TABLE OF CONTENTS

Cover page i

Declaration ii

Certification iii

Dedication iv

Acknowledgements v

Table of Contents vii

Abstract  ix

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study 1

1.2 Statement of the Problem 4

1.3 Objectives of the Study 5

1.4 Research Questions 5

1.5 Research Hypotheses 5

1.6 Significance of the Study  6

1.7 Scope of the Study 6

1.8 Limitations of the Study 7

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1    Conceptual Framework 9

2.1.1 Concept of Fiscal Policy 9

2.1.2 Concept of Government Expenditure 11

2.1.3 Types of Government Expenditure 14

2.1.4 Measurement of Government Expenditure 15

2.1.5 Role of Government Expenditure 16

2.1.6 Tax Revenue 17

2.1.7 Tax Administration in Nigeria 20

2.1.8 Tax Avoidance and Tax Evasion Practices 22

2.1.9 Concept of Investment 23

2.1.10 Fiscal Policy and Investment 25

2.2.1 Classical Theory of Investment 28

2.3 Empirical Literature 32

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design  37

3.2 Area of Study 37

3.3 Sources of Data Collection 37

3.4 Model Specification 37

3.5 Description of the Research Variables 39

3.5 Method of Data Analysis 39

CHAPTER FOUR: PRESENTATION OF DATA, ANALYSIS AND DISCUSSIONS 

4.1 Presentation of Data 41

4.2 Trend Analysis 42

4.2.1 Investment Expenditure (INVEXP)   42

4.2.2 Trend of Total Government Tax Revenue (TTR)       43

4.2.3 Trend to Total Government Expenditure (TGEXP)  44

4.3 Regression Analysis 45

4.4 Test of Hypothesis 46

4.5 Discussion of Results 46

CHAPTER FIVE:  SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS  

5.1 Summary of Findings 48

5.2 Conclusion    48

5.3 Recommendation    49

APPENDIX

REFERENCES