ABSTRACT
This study investigated the impact of tax revenue and good governance on infrastructural development in Nigeria.
The Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS and The Debt Management Board were chosen for the purpose of the study. The data used in the study was obtained majorly from secondary sources.
The regression analysis table provides a comprehensive overview of the results derived from a Fully Modified Ordinary Least Squares (FMOLS) model. This analysis aims to shed light on the intricate relationship between the natural logarithm of infrastructural development (LNINFD) and several key independent variables, including the natural logarithms of tax revenue (LNTREV), good governance factors (LNGGF), foreign direct investment (LNFDI), and total public debt (LNTPD).
Turning our attention to the coefficients and t-statistics, it's essential to note that these values offer crucial insights into the impact of each independent variable on LNINFD. The intercept term (C) has a coefficient of 4.273294, but it is not statistically significant (p-value = 0.5739), implying that the intercept does not significantly deviate from zero. Shifting to the independent variables, LNTREV boasts a positive coefficient of 2.152029. Although this coefficient is positive, indicating a potential positive relationship with LNINFD, it does not reach statistical significance at the conventional 0.05 significance level (p-value = 0.0708). In contrast, the coefficient for LNGGF is positive at 0.583556, and importantly, it is statistically significant (p-value = 0.0128), implying a discernible positive correlation between good governance factors and infrastructural development. LNFDI, on the other hand, bears a negative coefficient of -1.633981 and is highly statistically significant (p-value < 0.001). This finding underscores a robust inverse association between foreign direct investment and infrastructural development.
The study's findings carry important policy implications for Nigeria’s infrastructural development. First and foremost, the positive and statistically significant relationship identified between good governance factors (LNGGF) and infrastructural development (LNINFD) underscores the critical role of good governance in fostering infrastructure growth. Therefore, policymakers should prioritize measures to enhance good governance practices in the country. This includes strengthening institutions, improving transparency and accountability mechanisms, and fostering the rule of law. By doing so, Nigeria can create an environment conducive to infrastructure development, attract investment, and ensure that public funds are utilized efficiently and effectively.
