IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA

Effective utilization of government expenditure plays a pivotal role in fostering substantial growth and development on a global scale. Despite the escalating government expenditure in Nigeria, tangible progress and development have not been fully realized, positioning the country among the still underdeveloped nations worldwide. This study examined the impact of government expenditure on economic growth in Nigeria (1981-2022). Government expenditure is categorized into two, capital expenditure which includes spending on fixed assets such as roads, education health facilities etc. and recurrent expenditure which includes spending on salaries, pensions, subsidies etc. The ex-post factor research design was adopted while data was sourced from the Central Bank of Nigeria Statistical Bulletin. The hypothesis was tested using multiple linear regression analysis (Robust least square technique). The results from the findings show that capital expenditure has an insignificant effect on economic growth while recurrent expenditure has a positive significant effect on economic growth. This study recommends that; the federal government should not only increase its expenditure on priority sectors of the economy such as education, agriculture, mining and infrastructural development, but also ensure spending efficiencies, transparent budgetary processes and strict monitoring of government projects. Also, the government should increase its recurrent expenditure in payment of salaries and provision of goods and services but also reduce government borrowings as they have been seen to foster economic growth.

1 29 Mar, 2024

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JBMIC PORTAL SYSTEM

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