Effect Of Government Expenditure On The Economic Growth In Nigeria. (2000-2018)

ABSTRACT

The study examined effect of government expenditure on economic growth of Nigeria rom year 2000 to 2018 to determine the relationship between the variables during the democratic dispensation. It employed ex post facto research design and extracted data from CBN statistical bulletin. It extracted government expenditure on education, health and agriculture as the independent variables while percent change in real gross domestic product was used as economic growth. The study hypothesized that government expenditure on education, health and agriculture each has no significant effect on economic growth of Nigeria. The Dickey-Fuller unit root approach was employed to determine whether the variables are stationary and confirmed that they are stationary at first difference. The study adopted Johansen co-integration test to determine the long run relationship while the error correction method was employed to test the hypotheses. The results established that government expenditure on education and health individually has negative significant relationship with economic growth at lag length one while the expenditure on agriculture has positive relationship with economic growth in the short run at lag length two. It also found that government expenditure on education, health and agriculture each has significant effect on percentage change in real gross domestic product. The study therefore concludes that government expenditure has significant effect on economic growth of Nigeria and recommends that government should ensure that expenditure on education is also directed towards those areas such vocational and technical education that will immediately impact on economic growth, government expenditure on health should be to improve health facilities so as to avoid capital flight and expenditure on agriculture should be towards improving the agricultural processing to enhance value chain.

 TABLE OF CONTENTS

Tittle Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Declaration                                                                                                                                                                                                                                                                

Certification                                                                                                                                                   

Dedication                                                                                                                                                       

Acknowledgements                                                                                                                                        

Table of Contents                                                                                                                                           

List of Tables                                                                                                                                                   

Abstract                                                                                                                                                          

CHAPTER ONE: INTRODUCTION

1.1 Background of Study                                                                                                                                1.2 Statement of Problem                                                                                                                              

1.3 Objective of the Study                                                                                                                             

1.4 Research Question                                                                                                                                    

1.5 Research Hypothesis                                                                                                                                

1.6 Significance of the Study                                                                                                                          

1.7 Scope and Limitation of the Study                                                                                                          

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Conceptual Framework                                                                                                                              

2.1.1 Concept of Government Expenditure                                                                                               

2.1.2 Component of Federal Government Spending                                                                                                      

2.1.3 Education in Nigeria                                                                                                                               

2.1.4 Concept of Economic Growth                                                                                                          

2.2 Theoretical Literature Review                                                                                                                          

 

2.2.1 Musgrave Theory of Public Expenditure Growth                                                                                  

2.2.2 The Keynesian Theory                                                                                                                                                                                            

2.2.3 Neo Classical Growth Theory-The Growth Accounting Theory                                                  

2.3    Empirical Review                                                                                                                                             

2.4    Summary of Review of Related Literature                                                                                    

2.5    Identified Gap in Empirical Literature                                                                                            

CHAPTER THREE: METHODOLOGY

3.1 Research Design                                                                                                                                               

3.2 Area of the Study                                                                                                                                             

3.3 Method of Data Collection                                                                                                                                        

3.5 Model Specification                                                                                                                              

 3.6 Description of Data                                                                                                                                     

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Data Presentation                                                                                                                                               

4.2 Stationary Test                                                                                                                                                   

4.3 Effect of Government Education Expenditure on Economic Growth                                                                                                                         

4.3.1 Test on Hypothesis 1                                                                                                                                   

4.3.1 Test on Hypothesis 2                                                                                                                         

4.4     Effect of Government Agriculture Expenditure Economic Growth                                         

4.4.1  Test on Hypothesis 3                                                                                                                        

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary of Findings                                                                                                                                           

5.2 Conclusion                                                                                                                                                              

5.3 Recommendation                                                                                                                                                 

Reference                                                                                                                                                             

Appendix