An Evaluation of Fiscal Policy Coordination’s Role in Enhancing Economic Stability in Nigeria
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Background of the Study
Fiscal policy coordination involves harmonizing various fiscal tools and regulatory frameworks to ensure a stable macroeconomic environment. In Nigeria, economic instability often arises from disjointed fiscal practices and conflicting policy initiatives. Coordinated fiscal policies have emerged as a strategy to mitigate volatility by aligning government spending, taxation, and borrowing decisions (Balogun, 2025). Recent reforms emphasize improved inter-agency collaboration and strategic planning to enhance policy consistency (Adeyemi, 2023). The literature indicates that well-coordinated fiscal policies are associated with reduced inflation, lower fiscal deficits, and enhanced economic stability (Okoro, 2024). In the Nigerian context, where economic shocks are frequent, policy coordination is seen as vital for cushioning adverse impacts and promoting sustainable growth. Enhanced coordination facilitates efficient resource utilization and fosters investor confidence, thereby contributing to broader economic resilience. The present study examines the mechanisms through which fiscal policy coordination can stabilize the economy by minimizing policy overlaps and improving fiscal discipline. As Nigeria strives to maintain economic equilibrium amidst global uncertainties, effective coordination of fiscal policies is indispensable. The evolution of fiscal management practices continues to underscore the importance of institutional coherence and strategic alignment in achieving long-term economic stability (Adeyemi, 2023; Okoro, 2024; Balogun, 2025).
Statement of the Problem
Nigeria’s economy remains vulnerable to shocks due to fragmented fiscal policy implementation and a lack of coordination among governmental agencies. Inconsistencies in budget execution and overlapping mandates have led to inefficiencies that undermine economic stability (Balogun, 2025). Despite reform initiatives, these coordination challenges persist, resulting in policy gaps that exacerbate fiscal deficits and inflationary pressures (Adeyemi, 2023). The absence of a unified fiscal framework impedes effective economic planning and creates uncertainty in investment climates. This study seeks to determine whether improved fiscal policy coordination can address these shortcomings and foster a more stable economic environment (Okoro, 2024).
Objectives of the Study
- To evaluate the effectiveness of fiscal policy coordination in promoting economic stability in Nigeria.
- To identify key challenges hindering coordinated fiscal practices.
- To propose strategies for enhancing fiscal policy integration.
Research Questions
- How does fiscal policy coordination affect economic stability in Nigeria?
- What are the main challenges to achieving effective fiscal coordination?
- What policy measures can enhance fiscal integration?
Research Hypotheses
- Fiscal policy coordination has a positive effect on economic stability in Nigeria.
- Enhanced inter-agency collaboration reduces fiscal inefficiencies.
- Improved coordination leads to lower inflation and balanced growth.
Significance of the Study
This research provides valuable insights into how fiscal policy coordination can serve as a stabilizing force in Nigeria’s economy. The findings will assist policymakers in designing integrated frameworks to mitigate economic volatility, thereby promoting sustainable growth and investor confidence (Balogun, 2025; Adeyemi, 2023; Okoro, 2024).
Scope and Limitations of the Study
This study is limited to assessing the role of fiscal policy coordination in enhancing economic stability in Nigeria. The analysis is confined to fiscal management practices without addressing monetary policy interactions.
Definitions of Terms
• Fiscal Policy Coordination: The process of synchronizing government fiscal activities to achieve macroeconomic stability.
• Economic Stability: The condition of an economy characterized by steady growth, low inflation, and minimal volatility.
• Inter-agency Collaboration: The cooperative interaction between different government bodies to implement unified fiscal policies.
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