Macroeconomic policies and economic growth in Nigeria

Macroeconomic policies and economic growth in Nigeria was determined through co-integration and error correction modeling techniques. The time series properties of the variables were investigated by conducting a unit root test using annual series data for the period 1980-2013 and the data source was mainly Central Bank of Nigeria Statistical Bulletin. The result of the parsimonious ECM analysis shows that monetary rather than fiscal policy exerts a great positive impact on economic growth in Nigeria. Also, the granger causality results show bidirectional causation between GDP, total government expenditure and broad money supply. But a unidirectional causation between total government expenditure and broad money supply. Meaning that the emphasis on fiscal action of the government has led to greater distortion in the Nigerian economy. We are, however, of the opinion that a well-coordinated macroeconomic policy is needed to achieve economic growth in Nigeria. Also, both monetary and fiscal policies should be complementary.