The Impact of Federal Government Expenditure on Economic Growth in Nigeria (1981-2014)

Abstract

The study investigated the impact of federal government expenditure on the Nigerian economic growth. The main objective of the study was to ascertain whether there is a relationship between federal government expenditure and economic growth in Nigeria. The study adopted the Ordinary Least Square estimation technique to estimate the model specified using time series data for the period 1981-2014. Real Gross Domestic Product was used as the dependent variable while federal government capital and recurrent expenditures were used as the independent variables. The result from the regression analysis shows that federal government capital and recurrent expenditures have a positive effect on real GDP. The data used in the analysis were gotten from Central Bank of Nigeria (CBN) statistical bulletin. The study recommended that federal government should direct more of its recurrent expenditure towards economic and community services as they accelerate economic growth. The study also recommended proper management of public funds allocated to the agricultural sector and manufacturing industries as they have the potential of raising the nation’s production capacity and providing employment for citizens in the country.