Abstract
The research deals with analysis of Nigeria democracy and its impact on fiscal and monetary policies. Secondary data from Central Bank of Nigeria (CBN) was mainly used for this study. The study adopted descriptive statistics, regression and correlation analysis on fiscal and monetary variables (i.e., inflation, interest rate, narrow money, broad money, government recurrent and capital expenditure). The objectives of the study are to describe the trend of policy variables; examine the impact of fiscal and monetary instruments on economic growth (i.e, Real Gross Domestic Product (RGDP) as proxy for economic growth) and to make recommendations based on the research findings. The results revealed that there has been fluctuation in the trend of policy variables in Nigeria (i.e., inflation rate, interest rate, narrow money, broad money, government re-current and capital expenditure) considered with reference to the stable democracy in Nigeria between 1999-2008. The results also show that 96.3% of the variation (model 1) has been explained by the explanatory variables, 98.1% of the variation in dependent variable (model 2) has been explained by the explanatory variable, 99.4% of the total variation in dependent variable has been explained by the explanatory variables (model 3) and 85.7% of the variation in dependent variable (model 4) has been explained by the explanatory variables. The results further showed that broad money and re-current expenditure have positive relationship with RGDP which shows that a unit increase in the aforementioned variables will lead to a unit increase in GDP, but re-current expenditure is 5% significant with broad money having no significant level. Narrow money, inflation, interest rate and capital expenditure have negative impact on GDP, though; interest rate is significant at 10% probability level. The correlation results further showed that narrow money, broad money and government recurrent expenditure are significant at 1% probability level while government capital expenditure is significant at 5% probability level with inflation and interest rate having no significant relationship and negatively related with RGDP. The study concluded that narrow money, broad money, government recurrent expenditure and capital expenditure are significant variables that affect economic growth in Nigeria.
Highlights
Governance has been described as the exercise of political power in the management of human affairs and the material resources at federal, state and local government level
The purpose of this study is to fill the gap by testing the bill rate, using pooled data for twelve commercial comparative effect of the two policy variables in the banks, he estimated the model by method of Ordinary case of developing economy like Nigeria
Inflation is inversely related to growth in the economy i.e. the higher the inflation rate, the lower the economy growth and the lower the inflation rate, the higher the economy growth
Summary
Governance has been described as the exercise of political power in the management of human affairs and the material resources at federal, state and local government level. Economic foundation of a country largely determines by its political structure. Governance is policy making and policy execution regulated by systems of laws and guidelines which are segregated into specific operations to achieve national objectives. The art of governance is rather complex because it influences economic, political and social aspects of a nation. Effective government is achieved by means of good public policies with clear objectives, targeted programmes and readiness to anticipate and review outcomes if and when necessary. All governments have the responsibility to maintain stable macroeconomic policies
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