Thesis Abstract

Abstract
This research project conducts an empirical investigation into the impact of fiscal deficits on state government capital projects in Nigeria between 1985 and 1994. Fiscal deficits have been a persistent issue in Nigeria, affecting various sectors of the economy. The study aims to analyze how fiscal deficits have influenced the implementation of capital projects at the state government level during the specified period. The research utilizes a quantitative approach, employing data from state government budgets, financial records, and project implementation reports. By employing regression analysis and other statistical methods, the study seeks to establish the relationship between fiscal deficits and the execution of capital projects. The data analysis will also consider other relevant variables that may have influenced project implementation during the period under review. The findings of this research will provide valuable insights into the dynamics of fiscal deficits and capital projects in Nigerian state governments. Understanding the effects of fiscal deficits on project implementation is crucial for policymakers and stakeholders in enhancing fiscal management and improving the delivery of public infrastructure. By identifying the specific ways in which fiscal deficits impact capital projects, this study aims to contribute to more effective decision-making processes in state government budgeting and project execution. The period of 1985-1994 is particularly significant due to the economic challenges and policy changes experienced in Nigeria during that time. The research will examine how fiscal deficits, influenced by factors such as government revenue, expenditure patterns, and external shocks, have affected the prioritization and execution of capital projects at the state level. The study will also explore any variations in the impact of fiscal deficits across different states and regions in Nigeria. Overall, this research project seeks to fill a gap in the existing literature by providing a comprehensive analysis of the effects of fiscal deficits on state government capital projects in Nigeria. By offering empirical evidence and insights, the study aims to contribute to the discourse on fiscal management, public investment, and economic development in Nigeria. The findings are expected to be relevant for policymakers, researchers, and practitioners interested in improving the efficiency and effectiveness of public expenditure in the country.

Thesis Overview

1.0 INTRODUCTION
The chapter is intended to be introductory in nature, shedding light on the effects of tiscal deficit on state government capital projects in Nigeria. This feat will be achieved through a brief description of fiscal deficits and capital projects.
The chapter will also contain statements on the purpose of study, objectives of study, the constraints in the course of the study as well as the organization of work as it will be encountered in this study.

1.1 GENERAL PERSPECTIVES
The concept of fiscal deficits will be described in the context of its meaning and implications in sub-section 1.1.1. while the trend of fiscal deficit will be the subject of attention in sub-section 1.2.2

1.1.1 The Concept of Fiscal Deficit
Fiscal deficits results from the budgetary operations of the government when the total expenditure exceed the revenue for a given period. The effect of a given overall deficit on aggregate demand de~endso n the way the deficit is financed. Financing can come from external and/or domestic borrowing whcn financing comes from external source and is tied to expenditure abroad, there will
be no immediate impact on domestic demand. But foreign borrowing used to finance domestic expenditure will have an expansionary impact on the domestic economy.
Domestic sources of deficit financing can be divided into three;
a) The Central Bank
b) The Commercial/Merchant Banks, and
c) Non-Bank Sources
Net borrowing from the Central Bank is usually expansionary as the increase in credit to the government is not necessarily compensated for by a reduction in credit to the private sector. Consequently, the increase to the government increases the monetary base and through the money multiplier, the
money supply, thus leading to an expansionary economy. If the con~mercial/merchant banks did not have available excess reserves that could be lent to government to finance the deficit, the government’s
borrowing would be at the expense of loans to other sectors. If the banks had the excess reserves or the Central Bank makes such available, there would be no offsetting impact on other sectors, so that the credit given to government will
expand aggregate demand and ultimately the money supply.
The impact of non-bank borrowing on private sector demand is not too certain. If this comes from voluntary purchases of government debt instruments, the liquidity of the private sector will fall, although it’s wealth is not affected.
This could however trigger off an increase in interest rates which could crowd out private sector investments. However, in a period of monetary ease, such crowding out will not take place.
1.1.2. Trend of Fiscal Deficit
In recent year, state government have been faced with a current fiscal
surplus and overall fiscal deficits in their operations. This can be attributed to increase expenditures occasioned by a host of factors including deteriorating infrastructures, growing population and difficulties or broadening the tax base to enhance government earnings.
1.1.3 Capital Projects
Capital projects are projects that require huge expenditures in the provision of instrun~ents and social amenities, and social goods.

1.2 PURPOSE OF STUDY
The purpose of this study is to determine empirically, the effects of fiscal deficits on state governments capital projects in Nigeria between the years 1985 and 1994, both years inclusive.
1.3 STATEMENT OF PROBLEMS
Fiscal policy, to a large extent, determines the level of fiscal deficit incurred in any period. The policy is aimed at influencing the consumption pattern in the economy in order that the broad macro-economic objectives of the economy can be achieved. In view of the above assertions, the problems of this study are itemized below;
1. Did the fiscal deficits of the Federal Capital Territory and the different states of the federation, between 1985 and 1994 lead to an increase in state governments capital projects?

2. If the fiscal deficits led to increases in state governments capital projects, to what extent was the increase in state governments capital projects attributable to fiscal deficits?
1.4 OBJECTIVES OF STUDY
The objectives of this study, which are derived from the problems of the study as enumerated in section 1.3 above, are statements of intentions with regards to how the problems of the study are to be solved.
1. To ascertain if there was a direct increase in state governments capital projects between 1985 and 1994 as a result of fiscal deficits recorded in the operations of the state governments.
2. To determine the extent to which changes in the level of state government capital projects are as a result of