ABSTRACT
The study examined Federal government expenditure and
economic growth in Nigeria. Data for the study includes; federal government
capital expenditure, federal government recurrent expenditure, gross domestic
product, per capita income and inflation rate. Data were extracted from CBN
statistical bulletin and were analyzed using multiple regression statistical
technique and ordinary least square (OLS).
The results revealed that (i) Federal government capital expenditure has
positive and significant effect on the real gross domestic product of Nigeria
(ii) Federal government recurrent expenditure has a positive but insignificant
effect on real gross domestic product of Nigeria (iii) Federal Government
Capital expenditure has a positive but insignificant effect on Per Capital
Income of Nigeria (iv) Federal Government Capital recurrent has a positive but
insignificant effect on Per Capital Income of Nigeria and (v) The relationship between total federal government
expenditure and Real Gross Domestic Product is not significantly moderated by
the rate of inflation in Nigeria. Based on the findings, the study recommends
that Nigerian
government should channel fund more on capital expenditure which has positive
effect on real gross domestic product, to enhance the economic growth of the
country. Also, there is a need for government to streamline and monitor the
channels non-interest recurrent expenditure passes through in order to
contribute meaningfully to the economic growth of the country. Government
should also review their recurrent expenditure especially salaries because of
high cost of living in the country currently.
TABLE OF
CONTENTS
Title
page i
Declaration
page ii
Dedication iii
Acknowledgement
iv
Certification
v
Table
of content vi
Abstract x
CHAPTER 1: INTRODUCTION
1.1
Background to the Study 1
1.2 Statement of the Problem 4
1.3
Objectives of the Study 5
1.4. Research
Questions 6
1.5. Research
Hypotheses 6
1.6.
Significance of the Study 7
1.7.
Scope of the Study 7
CHAPTER 2: REVIEW OF RELATED LITERATURE
2.1.1 The concept of government
expenditure 8
2.1.2 Economic
growth 12
2.1.3 Economic development in Nigeria 13
2.1.4 Infrastructure as an economic growth indicator 17
2.1.5 Human capital as an economic growth indicator 21
2.1.6 Gross
domestic product (GDP) as an economic growth indicator 24
2.1.7 Per capita income as an economic growth indicator 24
2.1.8 Government expenditure and economic growth 25
2.1.9
Capital expenditures and economic growth 28
2.1.10
Recurrent expenditures and economic growth 30
2.1.11 Impact of government expenditure on inflation 33
2.1.12 Government expenditure on the education sector 34
2.1.13 Government efforts on agricultural growth in
Nigeria 37
2.1.14 Investment on health and economic growth 38
2.1.15 Government expenditure size and its effects on economic
growth 40
2.2 Theoretical review 42
2.2.1 The Wagner’s theory of
increasing state activities 42
2.2.2 Economic growth theory 43
2.2.3 The Keynesian theory 43
2.3 Empirical review 44
2.4 Summary of empirical review 56
2.5 Gap in the literature 62
CHAPTER
3: METHODOLOGY
3.1 Research
Design 63
3.2 Area of the
Study 63
3.3 Sources of
Data 63
3.4 Method of
Data Analysis 63
3.5
Model Specification 63
3.6 Description
of Variable 65
CHAPTER 4: DATA PRESENTATION, ANALYSIS
AND DISCUSSION OF FINDINGS
4.1:
Data Presentation 67
4.2
Pre-estimation Diagnostics 67
4.2.1
Descriptive analysis 67
4.2.2
Unit root test 68
4.3 Model Estimation Based on OLS Technique
Specified for the Study 69
4.3.1 Effect of federal government capital and
recurrent expenditures on real
gross domestic product 69
4.3.2
Effect of federal government expenditure on per capita income 73
4.3.3: Moderation effect of inflation rate on the
relationship between
total government expenditure and RGDP
in Nigeria 76
4.4 Hypotheses
Testing 77
4.4.1 Testing for the effect of federal government capital expenditure
on real gross
domestic product of Nigeria 77
4.4.2 Testing for the effect of federal government recurrent
expenditure on real gross
domestic product of Nigeria 77
4.4.3 Testing for the effect of federal government capital expenditure
on per
capital income in Nigeria. 77
4.4.4 Testing for the effect of federal government recurrent
expenditure on per
capital income in Nigeria. 78
4.4.5 Testing for the moderation/interaction effect of inflation rate
on the relationship
between total federal expenditure and
economic growth in Nigeria. 78
4.5 Discussion of Findings 78
CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary of
Findings 82
5.2 Conclusion 82
5.3 Recommendations 82
5.4
Contribution to Knowledge 83
5.5
Areas for Further Research 84
REFERENCES 85
APPENDICES
LIST OF TABLES
4.1:
Descriptive statistics 67
4.
2 Descriptive statistics of normally distributed series 68
4.3
Zivot Andrews unit root test 69
4.4: Diagnostic test result on RGDP model series 70
4.5: Post estimation test on adjusted RGDP model 71
4.6: Effect of capital and recurrent
expenditures on real gross domestic
product 72
4.7: Diagnostic test result on PCI model series 73
4.8:
Post estimation test on adjusted PCI model 74
4.9:
Effect of capital and recurrent expenditures on per capita income 75
4.10: Results of
moderation/interaction effect of inflation rate on the
relationship
between government expenditure and RGDP. 76
CHINONSO, Z (2023). Federal Government Expenditure And Economic Growth In Nigeria . Repository.mouau.edu.ng: Retrieved Oct 12, 2024, from https://repository.mouau.edu.ng/work/view/federal-government-expenditure-and-economic-growth-in-nigeria-7-2
ZEAL, CHINONSO. "Federal Government Expenditure And Economic Growth In Nigeria " Repository.mouau.edu.ng. Repository.mouau.edu.ng, 31 Aug. 2023, https://repository.mouau.edu.ng/work/view/federal-government-expenditure-and-economic-growth-in-nigeria-7-2. Accessed 12 Oct. 2024.
ZEAL, CHINONSO. "Federal Government Expenditure And Economic Growth In Nigeria ". Repository.mouau.edu.ng, Repository.mouau.edu.ng, 31 Aug. 2023. Web. 12 Oct. 2024. < https://repository.mouau.edu.ng/work/view/federal-government-expenditure-and-economic-growth-in-nigeria-7-2 >.
ZEAL, CHINONSO. "Federal Government Expenditure And Economic Growth In Nigeria " Repository.mouau.edu.ng (2023). Accessed 12 Oct. 2024. https://repository.mouau.edu.ng/work/view/federal-government-expenditure-and-economic-growth-in-nigeria-7-2