GASPRO International Journal of Eminent Scholars

The study was sought to investigate the determining factors to the Nigerian weak fiscal status. Fiscal policy is the governmental use of taxation and spending to influence the conditions of the economy. Typically, fiscal policy comes into play during a recession or a period of inflation, when conditions are escalating quickly enough to warrant government intervention. The use of fiscal policy is very paramount in every society most especially in the less developed countries (LDCs) as a major tool for stabilization and for development to be sporadic. The study concludes that fiscal policy is considered one of the most important means of government intervention in economic activity; it is the foundations, standards, and frameworks developed by the government for the conduct of financial and economic activity in the country. Lack of job opportunities, inadequate infrastructure, tariff and non-tariff barriers to trade, obstacles to investment, lack of confidence in currency valuation, and limited foreign exchange are considered as the factors that weaken fiscal status of Nigeria. The lack of fiscal discipline generally stems from the injudicious use of discretion in formulating and implementing budgetary policies. Maintaining fiscal discipline is essential to maintaining macroeconomic stability, reducing vulnerabilities, and improving aggregate economic performance. One of the recommendations made was that government should ensure that there is functional fiscal policy in the Nigerian economy as it stabilizes a teetering nation and facilitate continued growth.