NEXUS BETWEEN GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA ECONOMY (1995 – 2018)
Abstract:This study examined the Impact of
Government Expenditure on Economic Growth in Nigerian from 1995 to 2018. The
main objective is to examine the impact of government expenditure on economic
growth in Nigeria. The study adopted ex-post facto research design. It used
annual time series data extracted from the Central Bank of Nigeria statistical
bulletin and annual report. The data collected were analyzed using multiple
regression techniques of the Ordinary Least Squares (OLS) with the aid of
Statistical Package for Social Sciences (SPSS). The analysis used Gross Domestic
product as dependent variable. Government Capital Expenditure, Government
Recurrent Expenditure and Money Supply as the independent variables. The result
revealed that Government Capital Expenditure with a p-value of 0.542 which is
statistically insignificant, has a negative impact on the growth of Nigerian
economy. Government Recurrent Expenditure with a p-value of 0.009 which is
statistically significant has a positive impact on economic growth in Nigeria.
Money Supply with a p-value of 0.000 which is statistically significant, has a
positive impact on economic growth in Nigeria. The study recommended that the
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. Also, Government should monitor the
contract awarding process of capital projects closely, to prevent against over
estimation of execution cost.