Assessment of Public Financial Management and Fiscal Outcomes in Nigeria: 1990 – 2019: An Empirical Investigation

Abstract

Public Financial Management (PFM) is a critical instrument for the implementation of economic policy and its works by influencing the allocation and use of public resources through the budget; and overall fiscal policy. The primary concern of this study is to assess the general impact of public financial management on fiscal outcomes in Nigeria, 1990 - 2015. The methodology: adopted for this study are basically Granger and Causality test, Unit Root, Co-integration, Autocorrelation and multi-collinearity test and Ordinary Least Square. Our major findings show that there is strong and positive relationship between public financial management and fiscal outcomes in Nigeria going by the various tests applied. The findings indicate that institutional factors such as corruption and literacy rate affect the institutional pillars of PFM in Nigeria. Poor budget coordinating institutions, lack of respect for the rule of law, weak fundamentals of appropriation templates and contract management and poor accounting systems are the critical factors undermining the ability of these pillars to positively influence fiscal outcomes in Nigeria. Based on the empirical findings of the study, it is recommended among others, that public sector expenditure programmes should be reviewed and prioritized to enhance: efficiency and effectiveness of overall fiscal outcomes in Nigeria. The study also recommended improvement in some critical institutions such as fiscal responsibility commission, fiscal jurisdictions through respect for law and order as well as close the leakages for looting government funds through better legislation. That PFM should uphold the platform of policy formulation, budget formulation, budget structures, payment systems, government accounting financial reporting, auditing and legislative control.