Empirical analysis of impact of deficit budget on economic growth of Nigeria from 1991 to 2021

Abstract

The research examined Empirical Analysis of Impact of Deficit Budget on Economic Growth of Nigeria from 1991-2021 using ARDL method the result shows that a unit change in budget deficit (BD) will lead Gross Domestic Product (GDP) to increase by 0.000172 in the short –run and also increase by 0.000191 in the long run. A unit change in Inflation (IF) will lead Gross Domestic Product (GDP) to decrease by 0.095251 in the short –run and also decrease by 0.105623 in the long –run, the ECM is -0.901805,   which means that the speed of adjustment in the short run is 90%, and it is statistically significant at 0.0001.The research concluded that there is need for government to cut capital flight in Nigeria by means of developing industries to increase import substitution program in the nation.