European Journal of Economic and Business (ISSN - 2456-3900)

Structural Factors and Budget Deficits in Nigeria

Momodu Ayodele A, Monogbe Tunde G


From records, many studies on public finance emphasis the problems of the Nigerian economy with focus on the revenue side
of the budget scrutinizing various ways of/ and means to improve on receipts. This paper has attempted to provide support
for the conjecture that certain structural characteristics, probably more related to the expenditure side of the budget than to
the revenue side, have made it more problematic for Nigeria to break out of the circle of budget deficits. Empirically, this study
seeks to ascertain those factors which might probably lead to increase in government deficit gap without a corresponding
increase in the level of economic development over the years. This study proposes that some structural factors have been
behind the ever teaming deficit gap of the Nigerian government. As such, four different factors were proposed and subjected
to statistical test in others to identify which of these factors truly deepen the government deficit gap in Nigeria. Having
subjected all proposed structural factors that could lead to increase in government budget deficit in Nigeria to statistical test,
the study reveals that economic development, lack of government control over expenditure and Government revenue growth
rate exhibit a positive and significant relationship, and thus deepens government budget deficit gap in Nigeria. The study,
therefore, suggests that lack of government control over its expenditure, growth rate of government revenue and economic
development pace are the major structural factors that deepen the budget deficit gap of the Nigerian economy. Hence, the
study concludes that government backwardness in terms of development and a very high degree of participation in the
commanding height of the economy makes it extremely difficult for the government to control its appetite for budget deficits.


budget deficit gap, structural factors, Nigerian economy

Full Text:


Adeneye, O.A. and Isa, A.A. (2016). “The Impact of Budget Deficit on the Nigerian Economic Growth”, 983–2014. 7(14):1–11.

AS Ojo (2014). “Deficit Financing and Economic Performance in Nigeria: A Preliminary Investigation”. British Journal of Economics, Management & Trade 4(11):1624–1643, 2014.

Humera, N. (2015). “The Relationship between Budget Deficit and Economic Growth of Pakistan”. Journal of Economics and Sustainable Development 6(11).

Momodu and Monogbe (2017). Budget deficit and economic performance in Nigeria: Saudi journal for business and management studies. Saudi Journal of Business and Management Studie 2(3): 312-321.

Monogbe and Okah (2017). Deficit financing in the process of economic development in Nigeria. Saudi Journal for Business and Management Studies 2(3).

Monogbe, T.G, Dornubari, I.G. and Emah, D.S. (2015). Deficit finance and the Nigeria economic performance. International Journal of Advanced Academic Research|Social Sciences and Education 1(3) (December).

Monogbe, T.G. (2016). Intergenerational causality effect of external debt on performance of the Nigerian economy (Revised Version). IIARD International Journal of Banking and Finance Research 2(1).

Momodu, A.A. (2012). Effect of debt servicing on economic growth in Nigeria. Reiko Journals of Business and Finance 4(3).

Momodu, M.M. and Ogbole, F.O. (2014). “Public Sector Spending and Macroeconomic Variables in Nigeria. European Journal of Business and Management 6(18).

Ogunbiyi, S.S. and Okoye, N.F. (2016). “Fiscal policy and economic growth: The Nigerian Experience (1970–2014).” Journal of Accounting and Financial Management 2(6).

Oludele, T.E. (2010). “Budget Deficit and Interest rate in South Africa.” Journal of Finance Development Economic and Management 2(1):32–42.

Michael, M.A. (2014). Baseline study on tax, Tax gap Analysis and Taxation in Nigeria. Civil Society of Legislative Advocacy Centre (CISALC). Retrieved from

Ogunleye, E. and Simon-Oke, O. (2004). The Impact of Public Sector Performance of Socio-Economic Welfare in Nigeria 1982–2002. The Nigeria Journal of the Social Sciences 3(1):73–88.

Wagner, R.E. and Weber, W.E. (1977). “Wagner’s Law, Fiscal Institutions and the Growth of Government”. National Tax Journal 30:59–68.

Vien, B.V. and Tatchalerm, S. (2015). ‘Exploring Government Budget Deficit and Economic Growth: Evidence from Vietnam’s Economic Miracle’, 42(3):127–148.


  • There are currently no refbacks.