ABSTRACT

The study investigated the effect ofmonetarypolicy andfiscal policy on economic ofNigeriafor the period 1981-2018 with specific objectives namely; to evaluate the effect oftotal government expenditure on economic growth ofNigeria, to examine the effect oflending interest rate on the Nigeria economy, to determine the effect of inflation rate on the Nigeria economy and to determine the impact ofbroad money supply on the Nigeria economy The specified model was estimated using the ECM OLS estimates to determine the level ofimpact that one variable has on the other. While E-views 10 statistical software was employed in computing the result, time series data were obtained from World Bank national accounts data and OECD National Accounts data files and the study establishes that total government expenditure had a positive relationship with economic growth at 5% level ofsignificance, Inflation Rate had a negative relationship with economic growth and statistically insignificant at 5% level ofsignificance, Lending Interest rate has a negative relationship with economic growth and statistically insignificant at 5% level of significance and finally, Broad Money has a strong positive relationship with economic growth at 5% level ofsignificance and It is recommended among others that the effective use ofmoney supply and government expenditure as key instruments of monetary and fiscal policy in Nigeria to improve economy. The government annual budget implementation and execution ofprojects should be monitored to ensure that the objectives ofthe budget is achieved, which include price stability, economic growth, increase employment, income distribution among others. This can be done by eliminating corruption, leakages of resources and inappropriate use ofresources. Interest rate should the reduced to one-digit to encourage borrowing, increase investment and output