Is there any Significant Contribution in Five Decades of Government Expenditure on Economic Growth in Nigeria?
Uju Ezenekwe, Chukwuma Dim, Uzochukwu Amakom

Fiscal policy can be a powerful tool for stabilizing the economy and avoiding large cyclical swings in unemployment and inflation because of its effect on tax rates, interest rates and government spending. In Nigeria, available statistics show that total federal government expenditure (capital and recurrent) and its components have continued to rise in the last five decades but unfortunately there is no complementary sustained real growth recorded during the period. Using the Keynesian framework arguing that expansion of government expenditure accelerates economic growth and endogenous growth models, this study examined the effect of government expenditure on economic growth in Nigeria for the past five decades. Employing Ordinary Least Square (OLS), the study found that total capital expenditure, total recurrent expenditure, expenditures on transport and communication, education, and health, as well as inflation and overall fiscal balance are statistically significant in explaining changes in economic growth. However, expenditures on defense and agriculture are not significant in explaining economic growth. The study recommended the need for proper management of capital expenditure and recurrent expenditure in a manner that will raise the nation’s production capacity and accelerate economic growth.

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