Faculty: Management Sciences
Department: Banking And Finance
Jeff-Anyeneh E. Sarah
Okonkwo V. I.
Ibenta S. N. O.
This research work ascertained the effect of government expenditure on economic growth and development in Nigeria from 1981 to 2016. This study was inspired by two leading controversial issues in the theoretical and empirical studies regarding effect of government expenditure on economic growth and development for emerging economies. Specifically, this study ascertained the effect of government recurrent and capital expenditure on growth rate of real gross domestic product, industrial development, standard of living, quality of education and health. The study utilized secondary data from Central Bank of Nigeria Statistical Bulletin, World Bank and United Nation Educational, Scientific and Cultural Organization (UNESCO) reports. The data collected were analysed using the Ordinary Least Square (OLS), Autoregressive Distributive Lag (ARDL) Co-integration and Granger causality test. The findings emanating from this study revealed that government recurrent and capital expenditure have no significant effect on Nigeria’s economic growth and development on one hand, while on the other hand, standard of living, quality of education and health were significantly affected by trend in government expenditure. In view of these findings, measures such as reducing foreign training, bogus allowances for political office holders, etc. should be tailored towards reducing government consumption expenditures. To augment government expenditure on the path of improving industrial growth, funds allocated for environmental factors of production such as electricity, road, water, communication, etc. should be appropriately utilized.