The study examined the interaction of public sector expenditure and economic development from 1999 – 2015. The specific objective was to assess the extent to which GDP affects EDU, HLT, DFS, AGR and PDS. Secondary data employed were from the CBN bulletin published in 2016. Multiple regression analysis and t-test were the statistical tools applied, with the use of SPSS for both data analysis and to test the hypotheses formulated for the study at 5% level of significance. The result revealed that GDP does not significantly affect EDU, HLT and AGR and as a result they do not have impact on economic growth. On the contrary, GDP significantly affects the DFS and PDS which do not have effect on economic development. The result shows that government spending on defense, security and public debt servicing has not brought about economic development. Therefore, there is need for change of orientation. The government should concentrate on investing in provision of proper education and adequate health facilities for the citizenry. More attention should also be given to agriculture for the purpose of sufficient food supply. All these measures could provide solution to insurgency and militancy which the government has spent so much to no avail.
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