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The Assessment of impact of Monetary and Fiscal Policy on Investments in Nigeria

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  • Mohammed, Ibrahim Danlami

    (Monetary Policy Department, Central Bank of Nigeria – Abuja)

  • Sanusi, Yakubu Muhammad

    (Monetary Policy Department, Central Bank of Nigeria – Abuja)

  • Ibrahim Dikko Mustapha

    (Monetary Policy Department, Central Bank of Nigeria – Abuja)

Abstract

This study assessed the interference of monetary and fiscal policy on investments in Nigeria by applying Error Correction Model using quarterly data from 2010Q1 to 2022Q4. The results show that exchange rate, government expenditure, money supply monetary policy rate, and public debt have both short-run and long-run relationships with investment in Nigeria, while government revenue is probably due to multiple taxes which exist in the economy only has a negative and insignificant relationship with investment in Nigeria, particularly in long run. Based on the above findings, the paper recommends that the monetary authorities should find and adopt an optimum monetary policy rate that would be conducive and encourage investment in the country. The fiscal authority should review the multiple taxes charged on businesses to encourage more investment into the economy.

Suggested Citation

  • Mohammed, Ibrahim Danlami & Sanusi, Yakubu Muhammad & Ibrahim Dikko Mustapha, 2024. "The Assessment of impact of Monetary and Fiscal Policy on Investments in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(11), pages 2707-2716, November.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:11:p:2707-2716
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    References listed on IDEAS

    as
    1. Victor Ugbem Oboh, 2017. "Monetary and Fiscal Policy Coordination in Nigeria: A Set Theoretic Approach," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(1), pages 48-58, March.
    2. Ezeibekwe, Obinna Franklin, 2020. "Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(1), pages 139-155.
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