ABSTRACT

 This study empirically examined the impact of fiscal policy tools on economic growth of Nigeria from 1981 to 2017. Secondary data was used to generate data for this study. This study employed unit root test, co-integration test and error correction test. The unit root test revealed presence of stationarity among the variables at their first and second difference, the co- integration test indicated presence of long run relationship among variables under study. However the Error Correction Model (ECM), revealed that government capital expenditure is negatively related to gross domestic product at lag 2 while, it showed positive relationship with gross domestic product at lag 1. Similarly government recurrent expenditure showed negative relationship with gross domestic product at lag and positive relationship at lag 2. Tax Revenue indicated negative relationship with gross domestic product at lag 1 and 3. The ECM result was rightly singed and significant; the speed of adjustment was 41. 1%. This study therefore recommends that government should as a matter of importance monitor every amount allocated to capital expenditure to ensure accountability and transparency for developmental purposes for which the capital budget were originally made for. Government should ensure that recurrent expenditure and tax revenue are properly manage in a manner that it will raise the nation's production capacity and accelerate economic growth.