The Role of Fiscal Policy in Promoting Growth

The paper examines fiscal policy as it influences growth through taxes and service delivery. It also reviews Nigeria’s experience with fiscal policy as well as challenges to its current system.

Author: Menachem Katz

Publication Date: December, 2012

Document Size: 31 pages

Recent experience with fiscal policy

  • Prior to 2004 fiscal policy was pro-cyclical subjecting the economy to boom-bust cycles
  • During 2004-2008 , with oil price-based rule and ECA, economy stabilized and inflation fell.
  • In 2009 and 2010 external shock and large spending expansion resulted in high budget deficits and depletion of ECA
  • Since 2012, fiscal policy has been tightened.