Do Geopolitical Risks and Economic Uncertainty Matter for Fiscal Sustainability in Nigeria?

Authors

E. A. Udeaja, Central Bank of Nigeria
S. T. Zimbo, Central Bank of Nigeria
P. F. Offum, Central Bank of Nigeria
B. O. Fashoro, Central Bank of Nigeria

Publisher

Central Bank of Nigeria

Keywords

geopolitical risks, economic uncertainty and fiscal sustainability

Abstract

This paper attempts to answer the question about whether geopolitical risks and economic uncertainty matter for fiscal sustainability in Nigeria. The paper employs the ARDL model and bounds test approach to cointegration to analyse quarterly data for the period 2010Q1 to 2021Q4. The main finding indicates that geopolitical risks significantly enhance fiscal sustainability in the short- and long-run, while economic uncertainty does not. Accordingly, the study recommends the implementation of policies aimed at maximising the benefits of rising oil price triggered by geopolitical risks to improve fiscal sustainability in Nigeria.

Author Bio

The authors are staff of the Research Department, Central Bank of Nigeria, Abuja.

Publication Title

CBN Economic and Financial Review

Issue

2

Volume

60

First Page

55

Last Page

69

Classification-JEL

G11, G18, H69, H87

Recommended Citation

Udeaja, E. A., Zimboh, S. T., Offum, P. F., and Fashoro, B. O. (2022). Do Geopolitical Risks and Economic Uncertainty Matter for Fiscal Sustainability in Nigeria? CBN Economic and Financial Review, 60(2). 55 - 69.