DOES GOVERNMENT EXPENDITURE AFFECTS ECONOMIC GROWTH? AN EMPIRICAL EVIDENCE FROM NIGERIA
Badamasi Usman Babangida
Volume 9 Issue 2
Abstract
This study investigates the relationship between government expenditure and economic growth in Nigeria for the period 1981 to 2021, using time series data on Gross Domestic Product, Total Government Capital Expenditure, Government Recurrent Expenditure on Education, Government Recurrent Expenditure on Health, Government Recurrent Expenditure on Economic Services and Government Recurrent Expenditure on Administration. The study employed the Johansen cointegration technique and Vector Error Correction Model in its analysis. After conducting the ADF Stationarity test, a long run relationship was established between GDP and the other explanatory variables. The study found a long run and positive relationship between Recurrent Expenditure on Education, Recurrent Expenditure on Health, Recurrent Expenditure on Economic Services and Total Capital Expenditure with Economic Growth. To boost the economy therefore, the study recommends for increasing government recurrent expenditure on health, education and economic services, as well as total capital expenditure so as provide basic infrastructures. Key Words: Government Expenditure, Economic Growth, Cointegration,
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