Fiscal Policy and Sectoral Output in Nigeria

This study examines the impact of fiscal policy on sectoral output in Nigeria in a multivariate cointegration model over the period 1981-2011. Empirical evidence shows that the five subsectors and four fiscal policy variables are cointegrated and that the fiscal policy variables have significant impact on sectoral output. Also, the study reveals that the contribution of fiscal policy variables especially the productive expenditure to building & construction is below expectation despite huge amount allocated to the sector yearly. The paper recommends appropriate regulatory and pricing reforms in the all the sectors but most importantly building & construction