Impact of Government Expenditure on Economic Growth in Nigeria


This study investigates the effects of public expenditure in education on economic growth in Nigeria over a period from 1977 to 2012, with particular focus on disaggregated and sectoral expenditures analysis. Government expenditures are very crucial instruments for economic growth at the disposal of policy makers in developing countries like Nigeria. The objective of this study is to determine the effect of public expenditure on economic growth in Nigeria using Error Correction Model (ECM). The study used Ex-post facto research design and applied time series econometrics technique to examine the long and short run effects of public expenditure on economic growth in Nigeria. The results indicate that Total Expenditure Education is highly and statistically significant and have positive relationship on economic growth in Nigeria in the long run. The result has an important implication in terms of policy and budget implementation in Nigerian. We conclude that economic growth is clearly impacted by factors both exogenous and endogenous to the public expenditure in Nigeria. It is therefore recommended that, there is need for government to reduce its budgetary allocation to recurrent expenditure on education and place more emphasis on the capital expenditures so as to accelerate economic growth of Nigeria and that Government should direct its expenditure towards the productive sectors like education as it would reduce the cost of doing business as well as raise the standard living of poor ones in the country

Keywords: Capital Expenditure, Education, Endogenous Growth, Error Correction Model, economic growth

Unique Article ID: IJBMR-148
Article Review Status: Published

Pages: 64-71 (Download PDF)

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This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License

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