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Author(s): Ejinkonye Remigius Chinwoke, Nwosu Samuel N., Ibecheole Onyekachi Chikamnele, Zakari Muhammed Uloghobui, Momodu Zuriat Mansur, Usman Abdulmalik.

Volume/Issue: Volume 7 , Issue 1 (2024)

Abstract:

This study assessed the fiscal policy and unemployment nexus in Nigeria using time series data covering 1990 to 2021. Economic downturn, poor living standard, inadequate employment generation and increasing unemployment rate are sources of concern and worry. Job creation seems not to be getting the needed attention in the scheme of economic policies in Nigeria. The proxies for fiscal policy were: government capital expenditure (GCE), government revenue expenditure (GRE), government external debt (GED) and government total revenue (GTR), while that for unemployment was the unemployment rate. Specifically, this sought to examine the nexus between GCE and unemployment rate, GRE and unemployment rate, GED and unemployment rate, and GTR and unemployment rate. The ex-post-facto research design was used while the hypotheses were tested at 5% significance level. The time series data obtained from the Central Bank of Nigeria statistical bulletin was analyzed using the OLS technique. The test results showed that: GCE had a coefficient of 3.84 and a probability of 0.9893; GRE had -0.000481 coefficient and a probability of 0.6365; GED had 0.000584 coefficient and a probability of 0.1292 while GTR had 0.002070 coefficient and a probability of 0.0000. The probability f-statistic value of 0.000000 showed that proxies for fiscal policy are jointly significant to the unemployment rate. The adjusted R2 and Durbin-Watson values were 86% and 1.798125 respectively. It was recommended that the federal government should: (1) apply her capital expenditure properly and direct it to sectors that will help create more jobs and reduce unemployment rate, (2) make her recurrent expenditure to be supportive of the various government infrastructures, (3) drastically reduce her growing and high debt profile without commensurate job opportunities, (4) use her revenue to drive the economy instead of being applied on non-productive, white elephant projects or misappropriated.

Keywords:

Capital Expenditure, Recurrent Expenditure, External Debt, Revenue, Unemployment Rate.

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