ABSTRACT

This study investigated the effect of fiscal deficit financing on economic growth in Nigeria. Data were collected from central bank of Nigeria (CBN) statistical bulletin from 1981 – 2016. The study employed the ordinary lest square (OLS), multiple regression, unit root and cointegration techniques in order to determine the effect of fiscal deficit financing in economic growth in Nigeria. The findings of the study revealed that fiscal deficit and capital expenditure has a huge negative significant effect on GDP in Nigeria while government recurrent expenditure has a positive effect on economic growth in Nigeria. the study therefore recommended that the government reduce the level of its fiscal deficit financing and there should be transparency, accountability in fiscal discipline on the part of the government officials charged with the responsibility of implementing and executing capital expenditure budget so as to ensure that it has a positive effect on real gross domestic product (proxy for economic growth).