CHAPTER ONE

1. 0 NTRODUCTION

The growth and development of the Nigerian economy has not been stable over the years as a result, the country’s economy has witnesses so many shocks and disturbances both internally and externally over the decades. Internally, the unstable investment and consumption patterns as well as the improper implementation of public policies, changes in future expectations and the accelerator are some of the factors responsible for it. Similarly, the external factors identified are wars, revolutions, population growth rates and migration, technological transfer and changes as well as the openness of the country’s Nigerian economy are some of the factors responsible.

The cyclical fluctuations in the country’s economic activities has led to the periodical increase in the country’s unemployment and inflation rates as well as the external sector disequilibria (Gbosi, 2001). In other words, fiscal policy is a major economic stabilisation weapon that involves measure taken to regulate and control the volume, cost and availability as well as direction of money in an economy to achieve some specified macroeconomic policy objective and to counteract undesirable trends in the Nigerian economy (Gbosi, 1998). Therefore, they cannot be left to the market forces of demand and supply as well as other instruments of stabilization such as monetary and exchange rate policies among others, are used to counteract are problems identified (Ndiyo and Udah 2003). This may include either an increase or a decrease in taxes as well as government expenditures which constitute the bedrock of fiscal policy but in reality, government policy requires a mixture of both fiscal and monetary policy instruments to stabilize an economy because none of these single instruments can cure all the problems in an economy (Ndiyo and Udah, 2003).

The Nigeria economy started experiencing recession from early 1980s that led to depression in the mid-1980s. This depression continued until early 1990s without recovering from it. Government continually initiated policy measures that would tackle and overcome the dwindling economy. Drawing the experience of the great depression, government policy measures which was used to curb the depression was in the form of increase government spending (Nagayasu, 2003).

Okunroumu, (1993) the management of the Nigerian economy in order to achieve macroeconomic stability has been unproductive and negative because with evidence in the adverse inflationary trend, government fiscal policies, undulating foreign exchange rates. The fall and rise of gross domestic product, unfavourable balance of payments as well as increasingly unemployment rates are all symptoms of growing macroeconomic instability. As such, the Nicrian economic is unstable to function well in an environment where there is lowcapacity utilization attributed to shortage in foreign exchange as well as the volatile and unpredictable government policies in Nigeria (Isaksson, 2001).

The aim of this work therefore is to assess the impact of fiscal policy on the macroeconomic stabilization of the Nigeria economy. To facilitate over task we divided this tudy into four sections. The next chapter represents the conceptual framework, while chapter 3 is the methodology, chapter four data analysis while chapter five concludes the study with appropriate recommendations.

1. 1. This material content is developed to serve as a GUIDE for students to conduct academic research work
2. 2. As a source for additional understanding of the subject.
3. 3. As a source for ideas for your own research work (if properly referenced).
4. 4. For PROPER paraphrasing (see your university definition of plagiarism and acceptable paraphrase)
5. 5. Direct citing (if referenced properly)
Thank you so much for your respect to the authors copyright.