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Fiscal Sustainability and Demographic Transition in Nigeria

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  • Olayiwola, Saheed O.
  • Osakede, Uche Abamba
  • Adeyemi, Francis O.

Abstract

This study investigates the impacts of demographic changes on fiscal sustainability in Nigeria. The study employed the Autoregressive Distributed Lag model with times series data from 1980-2021. It was found that old-age and young-age dependency directly impact government balance in the short-run and long-run. Health and education expenditures have negative effects on government balance. There is an increased government debt in a developing old-age and young-age economy. It was concluded that the demography transition has a comprehensive effect on fiscal sustainability; hence government needs adequate reviews of public health spending and reduces unnecessary expenses to maintain fiscal balance in Nigeria.

Suggested Citation

  • Olayiwola, Saheed O. & Osakede, Uche Abamba & Adeyemi, Francis O., 2023. "Fiscal Sustainability and Demographic Transition in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 12(1), March.
    • Handle: RePEc:ags:afjecr:340556
    DOI: 10.22004/ag.econ.340556
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    References listed on IDEAS

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    1. Sang-Hyop Lee & Jungsuk Kim & Donghyun Park, 2017. "Demographic Change and Fiscal Sustainability in Asia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 287-322, October.
    2. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2016. "Achieving Fiscal Balance In Japan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 117-154, February.
    3. Oded Galor, 2012. "The demographic transition: causes and consequences," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(1), pages 1-28, January.
    4. Sing Yun, Wong, 2021. "Impact of Demographical Structural Change on Public Health Care Expenditure in Malaysia," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 28(2), pages 21-42, December.
    5. Tauhidur Rahman, 2008. "Determinants of public health expenditure: some evidence from Indian states," Applied Economics Letters, Taylor & Francis Journals, vol. 15(11), pages 853-857.
    6. Mathias Dolls & Karina Doorley & Alari Paulus & Hilmar Schneider & Sebastian Siegloch & Eric Sommer, 2017. "Fiscal sustainability and demographic change: a micro-approach for 27 EU countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(4), pages 575-615, August.
    7. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2016. "Achieving Fiscal Balance In Japan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 117-154, February.
    8. Yun, Wong Sing, 2021. "Impact of Demographical Structural Change on Public Health Care Expenditure in Malaysia," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 28(2).
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    Political Economy; Public Economics;

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