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Federation Account Allocated Funds and Economic Growth in Nigeria: A Pre and Post Democracy Dispensation Assessments

Author

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  • Cordelia Onyinyechi Omodero

    (Department of Accounting, College of Management Sciences, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria)

  • John Uzoma Ihendinihu

    (Department of Accounting, College of Management Sciences, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria)

  • Kabiru Isa Dandago

    (Department of Accounting, Faculty of Management Sciences, Bayero University, Kano, Nigeria.)

Abstract

The study investigates the impacts of federation account allocated funds on economic growth in Nigeria prior to reinstatement of democracy and after the restoration witnessed in May 29, 1999. The study employs annual time series data from 1989-1998 for pre restoration evaluation while data employed for post reinstatement assessment span from 2007-2016. All data were collected from CBN Statistical Bulletin, 2016 edition. Ordinary Least Square (OLS) method was used to perform the multi-regression analysis with the aid of Statistical Package for Social Sciences (SPSS) version 20. The findings of the study disclose that FAFG has a significant positive impact on RGDP after restoration of democracy while prior to restoration of democracy, the result reveals an insignificant negative influence on RGDP. FASG has insignificant positive impact on RGDP both on pre and post restoration of democracy while FALG has insignificant negative impact on RGDP in both scenarios tested. This leads to a conclusion that mismanagement of funds by the three tiers of government in Nigeria is responsible for dwindling economic growth in Nigeria and recommends proper use of resources by all levels of government in the country.

Suggested Citation

  • Cordelia Onyinyechi Omodero & John Uzoma Ihendinihu & Kabiru Isa Dandago, 2019. "Federation Account Allocated Funds and Economic Growth in Nigeria: A Pre and Post Democracy Dispensation Assessments," International Journal of Economics and Financial Issues, Econjournals, vol. 9(2), pages 219-229.
    • Handle: RePEc:eco:journ1:2019-02-25
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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    2. Akanbi, Olusegun A. & Du Toit, Charlotte B., 2011. "Macro-econometric modelling for the Nigerian economy: A growth-poverty gap analysis," Economic Modelling, Elsevier, vol. 28(1-2), pages 335-350, January.
    3. Norman Gemmell & Richard Kneller & Ismael Sanz, 2013. "Fiscal Decentralization And Economic Growth: Spending Versus Revenue Decentralization," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 1915-1931, October.
    4. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
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    Cited by:

    1. Cornelius O. Okorie & Francisca N. Ogba & Harrison O. Iwuala & Christopher Arua & Nwankwo Felix & Victor C. Nwosumba, 2022. "Decentralization of South Eastern Nigeria’s Local Governments and Achievement of Mandates Enshrined in Nigeria’s 1999 Constitution," SAGE Open, , vol. 12(2), pages 21582440221, April.

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    More about this item

    Keywords

    Federation account; revenue allocation; democracy; economic growth; government;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H79 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other

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