IMPACT OF PUBLIC EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA 1981-2022.
Usman A. Ibrahim, Michael Duru, Saheed. S. Zakaree ,Egwaikhide C. Imoudu and Yakubu Alfa
Volume 5 Issue 1
Abstract
Public expenditure is a policy that permits the government to use its budgetary plans to achieve both desired and undesirable outcomes, such as the provision of infrastructure facilities, the reduction of poverty, the creation of jobs, and poor health care, education, and unemployment. Thus, this study reexamined how public spending affects Nigeria's economic expansion. It investigated the impact of capital expenditure, recurring expenditure, internal debt, and external debt on real gross domestic product (RGDP) using the non-linear autoregressive distributed Lag (NARDL) model. For the years 1981–2022, annual time series data were used. The main conclusions showed that capital spending had a strong asymmetric impact on real GDP over the long and short terms. From the findings, a 1% increase in capital expenditure in Nigeria resulted in a 0.19% rise in real GDP, causing a disproportionate shift in economic growth. Since an increase in public spending caused Nigeria's real GDP to rise by 19% at a significant level of 5%, the study suggests that capital expenditure is a key factor in determining economic growth. This indicates that capital expenditure is the primary driver of any economic expansion. As a result, sufficient funds ought to be allocated to development initiatives like building roads, dams, power plants, and industries. Keywords: Public Expenditure, Real GDP, Internal Debt, External Debt and NARDL Model
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