THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH (1981 – 2016)

THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH (1981 – 2016)

Abstract

This research work is on the impact of government expenditure on economic development in Nigeria. The main objective of this study is to empirically examine the impact of government expenditure on economic development in Nigeria. This research work made use of secondary data which were obtained from the Central bank of Nigeria Statistical Bulletin (2016). The data were collected for a period of thirty six years (i.e. 1981-2016). The Ordinary Least Square Regression Technique was employed in the analysis of the data.

It was found among other things that Based on the empirical analysis, it is concluded that government expenditure has positive relationship with economic development but has not significantly impacted on the economic development in Nigeria. This is due to the fact that government consumption expenditure depresses economic development in Nigeria while capital government expenditure increases development rate of the economy, but more as been spent on the recurrent expenditure than the capital expenditure over time. It is recommended that, the Federal government should spend more on education, health and physical infrastructures. At the same time, there is the prospect that revenue is limited to pursue the NEEDS programmes. Hence, it is important that government spends less on consumption expenditure (recurrent expenditure) and emphasizes more on capital investment that will stimulate private sector investment vis a vis economic development.

 

 

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