Impact of Deficit Financing on Economic Growth in Nigeria
This study examined the impact of deficit financing on economic growth in Nigeria for the period spanning from 1981 to 2016. Secondary data was used and sourced from the Central Bank of Nigeria’s statistical bulletin and was analyzed through the application of Augmented Dickey Fuller to ascertain the stationarity properties of the time series variables and ARDL Technique was employed for the regression analysis. The results from the unit root test revealed mixed degree of integration of the variables i.e. I(0) and (1) and the result from the ARDL regression estimate showed that government deficit finance over the years had significantly impacted on the output growth of Nigeria. The variables used in the study were jointly found significant in affecting the output growth of the economy as revealed by the F-statistics of the model 56.27987 (0.000000). The study therefore recommends that deficit financing should be increased effectively, and that government should ensure an efficient public expenditure process and fiscal discipline as well as maintenance of macroeconomic stability so that Nigerian economy can develop.
