The Causal Relationship between Government Revenue and Expenditure in Nigeria

For a long time, the link between how much money the government gets and how much it spends has been a big topic of discussion in the study of public finance. This paper looked at the cause-and-effect connection between government revenue and spending in Nigeria from 1981 to 2023 using a Granger-causality test. The results showed that there's a two-way relationship between total government spending and total government revenue, which matches the idea of fiscal synchronization. This outcome suggests that because government spending and revenue are connected, the government takes the decision on spending and revenue concurrently. Based on this idea, policymakers should work to increase revenue and cut spending all together to manage the country’s budget deficit effectively