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Fiscal Policy in Nigeria: Any Role for Rules?
Author:
Mr. Thomas Baunsgaard
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Series:
IMF Working Papers
Volume/Issue:
Volume 2003: Issue 155
Language:
English
Publication Date:
01 Jul 2003
DOI:
https://doi.org/10.5089/9781451857337.001
ISBN:
9781451857337
ISSN:
1018-5941
Pages:
37
Keywords:
WP; oil revenue; revenue; exchange rate; fiscal policy rules; oil-producing countries; nonrenewable resources; Nigeria; price rule; revenue volatility; IMF staff country report; government activity; Nigerian authorities; government wealth; taxation regime; Oil; gas and mining taxes; Fiscal rules; Oil prices
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Fiscal policy in oil-producing countries can be profoundly affected by oil revenue uncertainty and volatility. Policy formulation should factor in the exhaustibility of the natural resources and aim at reducing oil revenue volatility passed on to the economy. Past fiscal policy in Nigeria has not been successful in this regard, since both revenue and expenditure have been highly volatile, to a large extent reflecting oil price developments. The paper discusses the role an appropriately designed fiscal rule, nested within the long-run sustainable use of oil revenue, could have in providing a more stable framework for fiscal policy formulation. It also highlights practical implementation and transitional issues.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2003: Issue 155