Tag Archives: Recurrent Expenditure

Public Expenditure, Official Development Assistant and Economic Growth: A Time Series Analysis for Nigeria (1981 – 2018) (Published)

In addition to divergent views of economists on the effect of public expenditure on economic growth, results of existing empirical studies in developed and developing economies has remained inconclusive and tends to depend on the period of study, econometric method, nature of data and the composition of government expenditure. In this study, public expenditure in Nigeria is decomposed into domestic and the foreign receipts components. The domestic component comprises capital expenditure (GCE) and recurrent expenditure (GRE) while the foreign receipts component captures foreign inflow of official development assistance (ODA). Employing extended aggregate production function framework and bound test approach (ARDL model), this study examined the impact of each of these three components of public expenditure (GCE, GRE and ODA) on economic growth in Nigeria for the period (1981- 2018). The findings of this study indicate the existence of a long run relationship between the macroeconomic variables estimated in the model. The recurrent expenditure (GRE) has positive impact on economic growth both in the short-run and in the long-run, countering the widely held view that government consumption spending is growth-reducing. The capital expenditure (GCE) and official development assistance (ODA) have negative impact on economic growth in Nigeria both in the short-run and long-run. The granger causality test result shows no causal relationship between GDP and GCE and between GDP and ODA, but a bi-directional causal relationship exists between GDP and GRE. It is recommended that greater percentage of public fund should be expended as capital expenditure and such fund should be properly utilized on acquisition of physical capital and social overhead capital like transportation, electricity, communication, irrigation, flood control, research and human capital development, capital formation in agricultural and industrial sectors to enhance the productive capacity of the economy. ODA in recent times has been unreliable source of finance in Less Developed countries, hence Nigeria should not heavily depend on it. However, whatever ODA is received should be properly utilized and channel into productive projects which have significant positive impact on economic activities and wellbeing of the populace. The fight against corruption in the country should be frontally confronted to free more public fund for collective development purposes in the country.   

Keywords: Capital Expenditure, Nigeria, Official Development Assistance, Public expenditure, Recurrent Expenditure, economic growth

Financial Control and Accountability in the Public Sector in Nigeria (Published)

The research work examined the usefulness of financial control and accountability in the public sector institutions in Nigeria. The objectives of the study were to investigate if the control of public funds is appropriate and to find out whether necessary accounts are kept and to examine the proper administration of government funds.  The research was carried out, using the Federal Medical Centre, Owo, Ondo State as the case study. Primary Data was collected through convenience sampling method and using self-administered questionnaires for 40 respondents. They included Staff in the Audit and Account department. Also, Secondary data was retrieved from the Central Bank of Nigeria Statistical Bulletin on federally generated revenue and expenditure incurred (Capital and Revenue). Chi- Square was used to test the hypotheses. Simple Linear Regression was used to analyze the secondary data to test for the relationship between the revenue generated by federal government and expenditure incurred. From the findings, it was found that financial controls and accountability exist in the public sector. The researcher also found that a positive relationship exist between revenue generated by federal government and expenditures incurred. This study concluded that financial control and accountability is effective and efficient. Therefore, the study recommends that existing financial controls should be strengthened to improve accountability in the public sector in Nigeria.

Keywords: Accountability, Capital Expenditure, Public Sector, Recurrent Expenditure, Revenue, financial control

The Impact of Fiscal Policy on the Economy of Nigeria (1994 And 2014) (Published)

The study empirically examined the impact of fiscal policy on the economy of Nigeria between 1994 and 2014. Secondary method of data collection was used to generate data for this study and the sources of the data included annual reports /accounts and CBN statistical bulletin (2015). Multiple regression of ordinary least square estimation was the tool used to analyse the data in this study. In the model, real GDP (as dependent variable) was regressed on capital expenditure, recurrent expenditure, tax revenue and external debts. The study has revealed, that there exists no significant relationship between capital expenditure, recurrent expenditure, tax revenue and the real GDP representing the economy. However, the study found a significant negative relationship existing between external debts and the real GDP. This supports the Keynesian view of government active intervention in the economy using appropriate various policy instruments. The study therefore recommends that: Government should use fiscal policy to complement the adoption of effective monetary policy and maintain the rule of law to promote stability in the Nigerian economy. Government should ensure that capital expenditure and recurrent expenditure are properly managed in a manner that it will raise the nation’s production capacity and accelerate economic growth even as it reduces external borrowing.

Keywords: Capital Expenditure, Fiscal Policy, Nigerian Economy, Real GDP, Recurrent Expenditure