The Dynamic Analysis Of Fiscal Policies On Consumer’s Spending In Nigeria: A Time Series Approach

This paper examines the economic recession experienced in Nigeria that is being counteracted by aggressive fiscal policies that is geared toward encouraging spending on consumer goods or consumables. Using the ordinary least squares technique and data collected for the period 1970 – 2010, the study assessed the effectiveness of government’s fiscal measures to stabilize the economy through spending. From the consumer spending model developed in this research, we assessed the effectiveness of the key variables like inflation rate, interest rate, mortgage rate and annual earning increase in percent on retail price index. The paper finds that inflation rate and interest rate were the key variables that affects consumer spending, as such we recommend that fiscal measures targeted at reducing interest rate (lending rate) as well as controlling inflation should be the policy priority of the Nigerian government.