Assessing the Role of Fiscal Policy Coordination in Enhancing Business Investment in Nigeria
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Background of the Study
Fiscal policy coordination is pivotal for creating a conducive environment for business investment in Nigeria. Coordinated fiscal measures, which include harmonized tax policies, streamlined public expenditure, and prudent borrowing practices, can reduce uncertainty and encourage investor participation (Okoro, 2024). In a rapidly evolving global economy, businesses require stability and predictability in fiscal management to make long-term investment decisions. Recent policy initiatives have focused on aligning fiscal instruments to improve resource allocation, reduce regulatory inconsistencies, and enhance overall investor confidence (Balogun, 2025). Empirical evidence indicates that coordinated fiscal policies foster a stable macroeconomic environment, which in turn stimulates business investment and supports economic diversification (Adeyemi, 2023). The integration of fiscal policies helps mitigate the adverse impacts of policy fluctuations and external shocks, ensuring that capital inflows remain robust. This study examines how fiscal policy coordination influences business investment by analyzing policy reforms, investment trends, and the perceptions of market participants. It further explores the channels through which coordinated fiscal actions translate into improved investment outcomes, providing a nuanced understanding of the interplay between fiscal management and business confidence (Okoro, 2024; Adeyemi, 2023; Balogun, 2025).
Statement of the Problem
Business investment in Nigeria has not reached its full potential due to persistent fiscal policy inconsistencies and lack of effective coordination among fiscal authorities. These issues create an unpredictable investment climate that discourages long-term capital commitments (Balogun, 2025). Despite efforts to implement coordinated fiscal policies, challenges such as policy fragmentation, delayed implementation, and regulatory ambiguities persist, limiting the positive impact on business investment. Consequently, investor confidence remains low, and the growth of critical economic sectors is hindered. A thorough investigation is necessary to determine whether improved fiscal policy coordination can address these challenges and stimulate enhanced business investment (Adeyemi, 2023; Okoro, 2024).
Objectives of the Study
- To assess the role of fiscal policy coordination in enhancing business investment.
- To identify the barriers that impede effective fiscal coordination for investment.
- To propose policy recommendations for fostering a more favorable investment environment.
Research Questions
- How does fiscal policy coordination affect business investment in Nigeria?
- What are the main barriers to effective fiscal coordination?
- Which policy measures can further enhance business investment through improved fiscal coordination?
Research Hypotheses
- Fiscal policy coordination significantly improves business investment.
- Barriers to coordination negatively affect investor confidence.
- Enhanced fiscal coordination leads to higher levels of business investment.
Significance of the Study
This study is significant as it highlights the critical role of fiscal policy coordination in promoting business investment. The findings are expected to guide policymakers in creating a stable and predictable investment climate, thereby stimulating economic growth and development (Okoro, 2024; Adeyemi, 2023; Balogun, 2025).
Scope and Limitations of the Study
This study is limited to assessing the role of fiscal policy coordination in enhancing business investment in Nigeria. It focuses exclusively on fiscal factors without considering non-fiscal investment determinants.
Definitions of Terms
• Fiscal Policy Coordination: The process of aligning various fiscal measures to achieve a consistent economic framework.
• Business Investment: The allocation of resources by enterprises towards capital goods and expansion.
• Investor Confidence: The level of trust that investors have in the stability and predictability of an economic environment.
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