The macroeconomic fluctuations, taxation, and economic performance while controlling for public debt in Nigeria

Abstract

The macroeconomic fluctuations like the price of crude oil, inflation, and unemployment have been the main trending issues in Nigeria because they have an impact on everyone's well-being and also have an impact on the country's economic performance. This study's main goal is to use appropriate econometric models to investigate how macroeconomic fluctuations, taxation, and economic performance are related in Nigeria while adjusting for public debt. The results of the OLS regression model show that economic performance is significantly related to taxation and macroeconomic fluctuation while controlling for the public debt incurred in Nigeria and also show that the tax revenue has a positive significant impact on Nigeria's economic performance. The econometrics model such as OLS regression, unit root test, and the Johansen cointegration was applied. The results of the Johansen cointegration show that Nigeria's economic performance has a long-term relationship with taxation and macroeconomic fluctuation while controlling for public debt. The unit root test reveals that all the series are integrated into order 1 except the public debt, which is integrated into order 2. Therefore, the government should develop infrastructure and educate the populace on artificial intelligence, a new technological innovation that can support businesses in times of economic crisis, while also encouraging businesses and individuals to pay taxes by creating an enabling environment for businesses to thrive to increase national revenue and economic performance, which will ultimately effectively control or lower the public debt.