FISCAL POLICY, AUTOMATIC STABILIZERS, AND
MANUFACTURING SECTOR PERFORMANCE IN NIGERIA

ALUGBUO, Justin Chinweizu
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike Abia State, Nigeria
jc.alugbuo@mouau.edu.ng
EZE, Emeka
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture, Umudike Abia State, Nigeria
emekaeze@mouau.edu.ng
UZUEGBU, Joshua Chibuzo
Department of Economics
College of Management Sciences
Michael Okpara University of Agriculture Umudike, Abia State, Nigeria
Uzuegbu.chibuzo@mouau.edu.ng
ABSTRACT
The study investigated fiscal policy, automatic stabilizers and manufacturing sector performance in
Nigeria for the period 1981-2022 as the scope of the study. The ARDL estimation technique was used
for estimation while E-views 12 statistical software was employed in computing the result, time series
data were obtained from World Development Indicators (WDI). Results showed that total government
expenditure had negative relationship with manufacturing sector output in the short-run while in the
long-run, it had positive relationship with manufacturing sector output; Tax revenue had negative
relationship with manufacturing sector output in the current year and significantly contributed to
manufacturing sector performance in Nigeria in the previous years; gross fixed capital formation had
positive and insignificant relationship with manufacturing sector output in the current year at 5% level
of significance. Based on these findings, the study recommends among others that government should
increase and channel spending to capital projects and social overheads that will encourage private sector
investment.
Keywords: Automatic stabilizers, fiscal policy, manufacturing sector performance, tax revenue