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Modeling Nigerian Government Revenues and Total Expenditure: Combined Estimators’ Analysis and Error Correction Model Approach

Author

Listed:
  • Kayode Ayinde

    (Ladoke Akintola University of Technology)

  • Aliyu A. Bello

    (Ladoke Akintola University of Technology)

  • Opeyemi E. Ayinde

    (University of Ilorin)

  • Damilola. B. Adekanmbi

    (Ladoke Akintola University of Technology)

Abstract

The national total expenditure of a country is precipitated on several factors of which revenue generated could be one and very significant. This paper therefore examines the contribution of some selected sources of Nigerian government revenue to total national expenditure. Statistical and econometric techniques used for the data analysis are unit root test, cointegration test, combined estimators’ analysis, the error correction model (ECM) and the feasible generalized linear (FGLS) estimators. Results showed that the variables are non stationary but are stationary at first difference. The long-run relationship of total expenditure on oil revenue, non-oil revenue, federation account and federal retained revenue revealed that the variables are cointegrated and required the use of combined estimators. The effect of nonoil revenue and federal retained revenue is very significant. Investigations on the short-run modeling necessitated the use of FGLS estimators. The effect of ECM and federal retained revenue is very significant. Consequently, other sources of revenue apart from federal retained revenue need to be enhanced and tailored towards improving economic growth and development through national expenditure.

Suggested Citation

  • Kayode Ayinde & Aliyu A. Bello & Opeyemi E. Ayinde & Damilola. B. Adekanmbi, 2015. "Modeling Nigerian Government Revenues and Total Expenditure: Combined Estimators’ Analysis and Error Correction Model Approach," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 7(1), pages 1-14, March.
    • Handle: RePEc:psc:journl:v:7:y:2015:i:1:p:1-14
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    References listed on IDEAS

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    Cited by:

    1. OMODERO, Cordelia Onyinyechi, 2019. "Revenue Distribution From Federation Account And Money Supply: Evidence From Nigeria," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 19(1), pages 65-82.

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    More about this item

    Keywords

    unit root test; cointegration test; combined estimators; error correction model; feasible generalized linear estimators;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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