IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA
Abstract
The study analyzed the impact of government expenditure on Nigeria's economic growth from 1986 to 2021 using the Auto Regression Distributed Lag (ARDL) model. It focused on government capital expenditure, recurrent expenditure, and total expenditure. The Gross Domestic Product (RGDP) was used as a proxy for economic growth, while total capital expenditure, total recurrent expenditure, total expenditure, and domestic debt financing were used as explanatory variables. The results showed that total capital expenditure was positive and insignificant, while total recurrent expenditure was positive and insignificant. Total expenditure was negative and insignificant, while domestic debt finance showed a positive relationship with GDP in the long run. The study concluded that government expenditure indices had an insignificant impact on economic growth in the long-run. The recommendations include increasing budgetary allocation to capital projects, effectively utilizing funds, reducing debt patterns, increasing revenue sources, monitoring capital expenditure, balancing recurrent expenditure with growth in the real productive sector.
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