An Assessment of Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017)

  • S.O. Ajayi Department of Banking and Finance, Kogi State University, Nigeria
  • F. Modeyin Department of Banking and Finance, Kogi State University, Nigeria
  • O. Nwankwo Department of Banking and Finance, Kogi State University, Nigeria
Keywords: Budget, Budget Deficit Financing, External Sector Performance, Net Trade

Abstract

This paper assessed Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017); the general objective of the study is to assess Budget Deficit Financing of Nigeria in the context of her performance in the External Sector while the specific objective is tied to evaluating the implications of Budget Deficit Financing on Nigeria’s Net Trade and Foreign Direct Investment. The ADF unit root test and the Autoregressive Distributed Lag (ARDL) models were used as the estimation techniques of the data analysis. The findings of the study showed that 78% of the total variation in Nigerian Net Trade (NT) resulted from the explanatory variables (DFB and FDI) included in the model and conclude that: Budget Deficit Financing (DBF) has insignificant positive impact on the Nigerian External Sector Performance during the period reviewed, and that, FDI’s impact is significant and positive on the Nigeria’s External Sector Performance during the period reviewed. Hence, we recommend that government should focus on fiscal and monetary policies that will enshrine fiscal discipline for at levels of government and its agencies.

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Published
2019-09-30
How to Cite
Ajayi, S., Modeyin, F., & Nwankwo, O. (2019). An Assessment of Budget Deficit Financing and Nigeria’s External Sector Performance (1990-2017). Indian Journal of Commerce and Management Studies, 01-15. Retrieved from http://scholarshub.net/index.php/ijcms/article/view/1465
Section
Articles