BUDGETING PRACTICES AND FISCAL DISCIPLINE IN NIGERIA: AN EVALUATION OF BUDGET DEFICIT UNDER PRESIDENT BUHARI'S LEADERSHIP (2015-2023)

Abstract

This study examined budgeting and fiscal discipline in Nigeria. The specific objectives of the study were to investigate the effect of capital expenditure on the fiscal deficit-to-GDP ratio in Nigeria and to evaluate the effect of broad money supply on the fiscal deficit-to-GDP ratio in Nigeria.An ex-post facto research design was adopted, covering a period of nine (9) years from 2015 to 2023. The population, being finite, also constituted the sample for the study. The variables of interest covered the sample period from 2015 to 2023.The study employed both descriptive and inferential statistical techniques to analyze the dataset. The Ordinary Least Squares (OLS) regression technique was used to test the hypotheses. Other preliminary diagnostic tests were also conducted, including correlation analysis to test for multicollinearity, the Shapiro–Wilk normality test, and a heteroskedasticity test. The findings revealed that capital expenditure had no significant effect on the fiscal deficit-to-GDP ratio in Nigeria from 2015 to 2023 (p > 0.05). However, broad money supply had a significant effect on the fiscal deficit-to-GDP ratio in Nigeria during the same period (p < 0.05).Consequent upon these findings, the study recommended, among others, that the Central Bank of Nigeria (CBN) and the Ministry of Finance should coordinate policies to ensure that money supply is directed toward sectors that boost economic output and revenue without fueling inflation.