ABSTRACT

The study investigated the effect of internally generated revenue on economic growth in Nigeria spanning from 1994 to 2018. The objectives of the study were to investigate the effect of internally generated revenue on economic growth in Nigeria, and to ascertain whether there is a long run relationship between state internally generated revenue and economic growth in Nigeria. The study employedunit root test, Johansoncointegration test error correction mechanism, heteroscedasticity, autocorrelation and normality to evaluate objectives. Thus, revealed that internally generated revenue, fees and fines have a positive and significant impact on economic growth in Nigeria. Also there exist is a long run relationship between internally generated revenue and economic growth in Nigeria. In addition, heteroscedasticity test; it shows that there is absence of heteroscedasticity in the model, autocorrelation test; shows that there is no statistical presence of for autocorrelation and normality test which shows that error terms are normally distributed. based on the finding, the study recommended that; since value added tax has a positive effecton economic development during the period under study,policies should be geared towards improvement of value added tax so as to ensure that this taxsignificantly improves economic growth and development in the economy. The government should allocations more funds to various state in the country, for this will be visible in the economy if effectively utilized. Despite the significant of internally generated revenue, the government should be draft out more strategies to increase their internally generated revenue. This will aid to service challenges facing the economy of Nigeria today.