Empirical Investigation of the Nexus among Fiscal Policy, COVID-19 and Economic Growth in Nigeria

Abstract

This study was carried out to determine the effect of fiscal policy variables and Covid -19 on
Nigeria economic growth from 2015Q1 to 2020Q4. The Ordinary Least Square (OLS)
econometric method was employed in testing the relationship among the variables and the results
revealed that external debt as a fiscal policy variable has direct and significant effect on the
growth of the Nigerian economy while total government revenue has direct but insignificant
impact on the growth of the Nigeria economy. Furthermore, the COVID-19 has direct and
insignificant effect on the growth of Nigeria’s economy but the interaction between COVID-19
and fiscal policy have an adverse effect on the country economy. Therefore, it was, recommended
that the Nigerian government needs to fine-tune its fiscal responsibility by increasing its revenue
and expenditure based to bust the growth sector of the Nigerian economy since expenditure is a
function of revenue and there is a need to redirect fiscal policy measures toward varying the
Nigerian economy from oil and the Nigerian government should have the political will to applied
Anti-corruption laws, so that diversion of external debt fund to private pocket can be curtailed.