Exploring the Impact of Fiscal Stimulus Measures on Economic Recovery in Nigeria
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Background of the Study
Fiscal stimulus measures are critical tools for jumpstarting economic recovery during periods of downturn. In Nigeria, fiscal stimulus initiatives implemented between 2023 and 2025 have been designed to boost aggregate demand, create jobs, and stimulate investment. The theoretical framework suggests that targeted government spending and tax incentives can counteract the negative effects of economic shocks by increasing consumer spending and encouraging business expansion (Ogunleye, 2023). Empirical evidence from other emerging economies indicates that well-structured fiscal stimulus can lead to accelerated recovery, improved public confidence, and enhanced long-term growth (Adebayo, 2024).
In Nigeria, the use of fiscal stimulus has been particularly relevant in response to external shocks and domestic challenges such as low oil prices and global economic uncertainties. The measures include increased spending on infrastructure, direct cash transfers, and temporary tax relief for businesses. Despite these initiatives, debates persist regarding their overall effectiveness and potential side effects, such as increased public debt or inflationary pressures. This study explores the impact of fiscal stimulus measures on Nigeria’s economic recovery, assessing both the short-term and long-term outcomes and identifying the key factors that determine the success of these interventions.
Statement of the Problem
Although fiscal stimulus measures are intended to promote economic recovery, Nigeria continues to face challenges in achieving sustainable growth. The primary issue is that the effectiveness of stimulus spending is often undermined by implementation delays, misallocation of funds, and the risk of exacerbating fiscal deficits (Ibrahim, 2024). Moreover, there is concern that temporary measures may not lead to long-term structural improvements, leaving the economy vulnerable once stimulus effects wear off. The uncertainty surrounding the impact of these measures creates difficulties for policymakers, who must balance short-term recovery needs with long-term fiscal sustainability. This study aims to examine the efficacy of fiscal stimulus initiatives in fostering economic recovery in Nigeria and to identify the constraints that limit their impact, with the goal of informing future policy design (Nwankwo, 2023).
Objectives of the Study
- To assess the impact of fiscal stimulus measures on economic recovery in Nigeria.
- To identify the challenges that undermine the effectiveness of stimulus spending.
- To propose policy recommendations for sustainable fiscal interventions.
Research Questions
- How do fiscal stimulus measures affect economic recovery in Nigeria?
- What are the main obstacles in the effective implementation of fiscal stimulus policies?
- Which policy strategies can enhance the long-term benefits of fiscal stimulus?
Research Hypotheses
- H1: Fiscal stimulus measures significantly boost short-term economic recovery.
- H2: Implementation challenges reduce the effectiveness of stimulus interventions.
- H3: Well-targeted stimulus measures contribute to sustainable long-term growth.
Scope and Limitations of the Study
This study focuses on fiscal stimulus measures in Nigeria from 2023 to 2025, utilizing macroeconomic data, government reports, and expert interviews. Limitations include external economic shocks and challenges in distinguishing stimulus effects from other factors.
Definitions of Terms
– Fiscal Stimulus: Government policies aimed at increasing aggregate demand through spending or tax cuts.
– Economic Recovery: The process by which an economy rebounds from a downturn.
– Aggregate Demand: The total demand for goods and services within an economy.
– Fiscal Deficit: The shortfall when a government’s expenditures exceed its revenues.
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