When there is a budget deficit, government finds ways of financing the deficit through borrowing from commercial and merchant banks or from the nonbanking public and through the issue of shortterm bonds and monetary instruments. Reasons for non patronage in nigeria different sources through which busine sses can fish for fund. Pdf nigeria has been financing budget deficit overtime but their implications on economic stability have not been fully ascertained. It should be noted that inflation is persistent increase in price and not high price. Impact of deficit financing on economic growth in nigeria. The study investigated the impact of external debt on economic growth in nigeria for the period 19802012. Implications of nigerias draft petroleum fiscal policy nevertheless, the nigerian government needs to strike a balance between the countrys drive for increased oil revenue in the short term, and the long term guarantee of revenue from the major players in the industry through taxation. Credit management and bad debt in nigeria commercial banks implication for development agu, osmond chigozie1, basil chuka okoli department of economics and development studies, federal university, oyeekiti abstract. Supporting the above alternative sources of financing secondary education in ebonyi state of nigeria, ndu, ocho and okeke 1997 indicated that one of the sources of funds for educational development is community fund raising. In 2012, nigeria introduced the national financial inclusion strategy nfis and promoted it as a key driver in becoming one of the worlds largest economies the goal of nfis is to decrease the number of nigerians without access to financial services from 46.
Sustainable development financing the united nations. This study examines the implications of financing fiscal deficit from domestic sources on the development of the nigerian financial markets. Infrastructure financing instruments and incentives oecd. This study examines funding housing deficit in nigeria, it. University of benin, benincity, edostate, nigeria a bstract. Specifically, the study attempts to establish whether there is a significant relationship between fiscal. Annual time series data for 44years were collected from central bank of nigeria statistical bulletin, federal office of statistics and world bank handbook of statistics for the period of 197020.
Budget bulletin pwc nigeria analyses of nigerias 2016 budget and medium term expenditure framework introduction on tuesday 22 december 2015, president muhammadu buhari presented the 2016 budget to the national assembly. The main objective of the study is to empirically examine the effect of deficit financing on nigeria s economic growth. During the british colonial administration, nigerias economic posture at the international market was reckoned with in terms of agroallied products. An empirical analysis of the macroeconomic impact of. This study examined the effect of deficit financing on. Implications of nigerias draft petroleum fiscal policy. The decision of the federal government of nigeria announced on 17 january, 1983 by alhaji ali baba giving all illegal immigrants numbering between.
This is largely because of the improved income to the country arising from export of crude oil, nigerias major export. Nwoye, ejatavbo, febabor and onoja 1999, stated that education could be funded by means of endowments. Impact of deficit financing on economic stability in nigeria 115. Exploring projectspecific bonds to finance infrastructure. Thus, it is against this backdrop that this study intends to empirically investigate the relationship that exists between budget deficit and inflation in nigeria. Nigerias education system has become less dynamic over the past years. This research empirically appraises the causality approach of deficit financing and economic growth in nigeria. The study utilized data from publications of the central bank of. Foreign debt management and the development of nigeria.
Data was collected through the administration of the questionnaire numbering eighty 80. The minister of finance, in an april 8, 2016 article, mentioned that nigerias firstever project tied infrastructure bonds are being considered. As far as the banking system of nigeria is concerned, it has faced a lot of problems. Agbiogwu department of accountancy alvan ikoku federal college of education, owerri. The study set out to test for both a long run and causal relationship between external debt and economic growth in nigeria. Abstract this paper examines the financing of education in nigeria. Nigeria is confronted with the issue of limited capital and has to resort to foreign debt in order to augment domestic savings, balance of payment deficits, and shortfall in revenue which induce continuous raise in the debt stock at an alarming rate. There is no significant causal relationship between deficit financing and economic growth in nigeria within the period under study.
This paper examines the causes of bad and doubtful debt in nigeria commercial banks. The debt management office dmo nigeria is a government agency established to centrally coordinate the management of nigerias debt. Deficit financing seems to present a positive inflationary impact on developing economies particularly nigeria. Financial market development and fiscal deficit financing. National interest and national development in nigeria. Thus, it may be of great significance both theoretically and empirically. Pdf deficit financing and the growth of nigeria economy. The nigerian experience by isah imam paiko department of entrepreneurship and business technology, federal university of technology, minna. Pdf financial market development and fiscal deficit. Credit management and bad debt in nigeria commercial. Described as the budget of change, the president first gave an overview of 2015. In order to understand whether or not deficit financing impacts on economic growth. Data analysis shows that access to external finances strongly influence the economic development process of nigeria and.
According to the debt management office dmo, nigerias total debt has increased by about 90% in almost three years from about n12. Vector autoregressive estimates was used in estimating the model. Funding for primary health care is especially affected as the. The political, social and economic factors, which are currently having significant impact on the world economy, have necessitated the need to diversify the sources of education. The study examines the extent to which loan syndication has contributed to the performance of the nigeria enterprise. John2 1department of finance and banking, faculty of management science, university of port harcourt, port harcourt, nigeria 2first bank of nigeria limited, port harcourt north development office, 4 east west road, rumuokoro, port harcourt. A nigerian newspaper and online version of the vanguard, a daily publication in nigeria covering nigeria news, niger delta. Nigeria health financing system assessment world bank. The enabling environment is the term used to describe the broader system within which individuals and organizations function and one that facilitates or hampers their existence and performance undp, 2008. Country case study for the oslo summit on education for development. Impact on the nigeria economy abstract the study was focused on the study of loan syndication in the nigeria financial market and its impact on the economy. Structural and financing reform for nigerias education sector. Nigeria contributes 14% of africas agriculture gdp.
Consequently, a framework for explaining the impact of the scheme within the context of nigeria was designed through a triangulation of structural functionalist and rational choice theories. Possible sources of funding higher education in nigeria financing higher education in nigeria today is a crucial national problem. The study adopted the expost facto research design. African association of development finance institutions. Gross financing requirements percent of gdp, 19892000.
Impact of deficit financing on economic stability in. However, nigeria is not alone as financing is the major issue facing the housing sector anywhere in the world. Poverty is not an exclusively rural phenomenon, but it a fact that it is largely rural in nigeria, the majority of where people are in the rural area engaging primarily in subsistence agricultural activities. Overvew the purpose of this paper is to discuss the magnitude of exterr3l resources that subsaharan. Abraham nwankwo directorgeneral, debt management office, nigeria guest lecture presented at the university of nigeria, nsukka, may 31, 2011. Founded on january 22, 1995, thisday is published by thisday newspapers ltd. Basseyeyo, ceo, lani group and cofounder, axiom learning solutions. Looking at the figure 1 above, it shows the trend of economic growth in nigeria for 44 years starting from 1970 to 20. Sources of information on health system financing 3. Deficit financing in the process of economic development. Deficit financing in the process of economic development in nigeria monogbe tunde g1 and okah o. This study sought to investigate the implications of budget deficit financing on economic stability in nigeria between 1970. Gross financing requirements percent of gdp, 19892000 6 selected ibrd borrowers.
It notes that health care in nigeria is financed through different sources. This accounted for the reason why financing education in nigeria. The effort to address this challenge of funding, the nigeria mortgage refinancing company nmrc was. Time series data on external debt stock and external debt service was used to capture external debt burden. Ajisafes study was preoccupied with the monetary factors that could cause inflation, at the expense of fiscal factors. The federal government has been making concerted efforts to attract private sector financing with a view to bridging the infrastructure deficit in nigeria. One of the most destructive problems faced by the nigerian financial sector is the huge amount of npls which not only harm efficiency and growth of the banking. Nigeria has been financing budget deficit overtime but their implications on economic stability have not been fully ascertained. Since deficit financing increases the total volume of outlay, hence the monetary aggregate demand for existing goods and services rises which poses a potential inflationary gap, causing prices to.
The study postulates that external debt does not contribute to the economic growth of nigeria. Abstract deficit financing is a recurrent decimal in nigerian economy. Total public debts debt management office nigeria debt management office nigeria. This taxonomy of instruments and incentives for infrastructure financing maps out the investment. Nigerias capacity or otherwise to service her debt.
A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. In the light of this, this study assesses the impact of public debt on external reserve in nigeria. In 20, nigeria and senegal both issued sukuk to finance large. We can only hope for the quick passage of the relevant. Policy implications and poverty reduction in nigeria ochalibe, alexander ibu department of agricultural economics, federal university of agriculture, makurdi awoderu, babalola kayode department of agricultural economics, federal university of agriculture, makurdi onyia, chiebonam chukwuemeka. Nigerias budget deficit and borrowing strategies the. Nigerian agricultural cooperative and rural development bank. They are producer of goods and services which help to increase economic growth and contribute significantly to employment creation. How to promote financial inclusion in nigeria world.
J department of economics obafemiawolowo university, ileife,osun state, nigeria ajilore o. Since independence, over 90% of nigerians budgets are in deficit. But fiscal factors cannot be ignored in a country like nigeria where deficit spending has become a more or less permanent feature of the budgetary process folorunso and abiola, 2000 12. Fiscal incentives in nigeria central bank of nigeria. Moreover others have argued that bad governance, especially during the military rule, largely accounted for the mismanagement of the nigerian economy and therefore, the. T university of cape town, south africa abstract the study investigates the sustainability of fiscal policy in nigeria over the period of 19802010 to. Impact of debt financing on the growth of manufacturing firms in nigeria, largest undergraduate projects repository, research works and materials.
This study examined the effect of deficit financing on economic growth of nigeria from 1987 to 2017. It is commonly held that deficit financing may lead to an inflationary rise in prices. Sbas office of entrepreneurship education provides this selfpaced training exercise as an introduction to financing options for your business. The general objective of the study is to analyze the effect of deficit financing on the economy. The emergence of public enterprise in nigeria the two major forces that led to the establishment of public enterprises in nigeria are the political and economic factors. Download undergraduate projects topics and materials accounting, economics, education. Pdf deficit financing and economic growth in nigeria.