IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 9 NO. 10 2023
DOI: https://doi.org/10.56201/ijebm.v9.no10.2023.pg172.184

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Public Expenditure and Economic Growth in Nigeria (2001 - 2021)

Kachina Eugene Iorwuese, Danjuma Naisla Hassan, Ilemona Adofu & Gimba Obadiah

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Abstract

The study attempts to establish the relationship between government spending and GDP in Nigeria from 2001 to 2021. The multiple regression analysis's ordinary least squares (OLS) method was employed. The econometric research shows that the independent variables (recurrent spending, capital expenditure, domestic debt, foreign debt, and exchange rate) have a positive connection with the dependent variable GDP. The OLS findings also show that the overall model accounts for over 94.98% of the changes in the dependent variable (R2 = 0.9498). This means that the variable will have a considerable impact on the GPD. The study suggests that there is an urgent need to instill fiscal discipline in government expenditure by initiating effective internal control measures and more proactive economic management coordination and implementation, as well as discouraging all known productive activities and expenditures at all levels of government. There is also a need for the government to ensure that its expenditures are channeled appropriately to sectors such as infrastructure development in order to boost investment and output, with the expected outcome of price stabilization.

Government Spending, Growth, The Nigerian Economy, Macroeconomics, Domestic

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References:

Adegboye, A. C. (2012). Is fiscal policy effectiveness affected by institutional setups in Nigeria?
Department of Economics, Adeyemin College of Education, Ondo.

Adu, G., Marbuah, G., & Mensah, J. T. (2013). Financial development and economic growth in
Ghana: Does the measure of financial development matter? Review of Development
Finance, 3(4), 192–16.https://doi.org/10.1016/j.rdf.2013.11.001.

Agbonkhese, A. O. and Asekome, M. O. (2014).Impact of public expenditure on the growth of
Nigerian economy. European Scientific Journal, 10(28): 219-229.

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