MONETARY FISCAL POLICY COORDINATION AND LONG-RUN ECONOMIC GROWTH SUSTAINABILITY IN NIGERIA: AN EMPIRICAL ANALYSIS

This study examines the dynamic impact of monetary fiscal policy coordination on thelong-run growth trajectoriesin Nigeria based on annual data from 1980 to 2023. Anchored on Monetarist principles, and Fiscal Theory of the Price Level, itemployed real gross domestic product as the dependent variable and total annual revenue, total government expenditure, monetary policy rate, broad money supply, and exchange rate as key explanatory variables. Autoregressive Distributed Lag approach was applied to capture both short-run and long-run effects, complemented by structural break tests. Empirical results indicate that 1% increase in total annual revenue and broad money supply corresponds to approximately 29.9% and 50.7% increase in real gross domestic product respectively, while 1% rise in monetary policy rate and total government expenditure reducereal gross domestic product by 5.1% an 69.9% respectively. Excessive government expenditure beyond revenue negatively affected growth, confirming fiscal inefficiencies. 1% increase in exchange rate increases real gross domestic product by 0.6%. Exchange rate fluctuations exhibited dual effect, supporting export competitiveness, while exerting inflationary pressures. The findings highlight that weak coordination between fiscal and monetary authorities undermines macroeconomic stability and long-run growth sustainability. This study fills a critical gap in Nigerian literature by explicitly quantifying the effects of monetary–fiscal policy coordination on growth sustainability, an area previously limited to separate analyses of fiscal or monetary policy. The results underscore the need for strengthened institutional coordination, evidence-based fiscal discipline, and calibrated monetary interventions to achieve resilient and inclusive economic development in Nigeria.