IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 4 NO. 2 2019

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Government Expenditure and Economic Growth in Nigeria

Okere P. A., Uzowuru L. N. & Amako J. C.

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Abstract

The study examined the relationship between of government expenditure and economic growth in Nigeria. The main objective of the study is to determine the impact of government expenditure on the economic growth in Nigeria. Data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin and covers the period of 1981-2016. The Granger Causality method of econometric and error correction model (ECM) technique are used. The result for stationarity shows that the series are integrated at first difference 1(1). Johansen Cointegration test was also employed and reveals the existence of long-run relationship among the variables. The result of Granger Causality revealed bi-directional causality between economic growth and government expenditure on administration and between economic growth and government expenditure on economic services. There is also a unidirectional causality between economic growth and Community Services. This study therefore recommends that government expenditure should be monitored. The audit should be carried on any project as this will act as a watch dog to the executive arm of the government. Effort should also be made to increase government funding on education and health to curtail the level of strike in our education and health sector

keywords:

Economic Growth, Granger Causality, Government Expenditure and Transfers

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