Budget deficits in Nigeria lead to increased current account deficits.
Nigeria has been spending more money than it earns, leading to budget deficits and current account deficits. A study looked at these twin deficits from 1981 to 2017 using different statistical methods. The results showed that when budget deficits increase, current account deficits also increase in Nigeria. This supports the idea from Keynes that deficits are connected. However, the study found that current account deficits cause budget deficits, not the other way around. The findings suggest that policies are needed to reduce both deficits in Nigeria.