IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 9 2024
DOI: 10.56201/jafm.v10.no9.2024.pg410.426

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Government Sectorial Expenditure and Economic Growth in Nigeria

Ijoma Rev. Sr. Mary Alice, Dr. Mrs. N. Ofor

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Abstract

This work empirically investigated the effect of government sectorial expenditure on economic growth in Nigeria. The study portrayed the extent to which government sectorial expenditures influence Nigerian economic growth. In order to determine the influence of government sectorial expenditure on economic growth, some key proxy variables were used in the study, namely; government sectorial expenditure on health, government sectorial expenditure on education and government sectorial expenditure on agriculture while economic growth on the other hand was represented by real gross domestic product. Three hypotheses were formulated to guide the investigation. The research design used is Ex Post Facto design and data for the study were obtained from the Central Bank of Nigeria Statistical Bulletin and Statement of Accounts spanning from 2001-2023. The statistical test of parameter estimates was conducted using Panel least squares regression model. The findings generally indicate that government sectorial expenditures on health, education and agriculture had positive and significant effect on economic growth in Nigeria at 5% level of significance. Based on this, the study concluded that government sectorial expenditures ensured Nigerian economic growth. The study therefore suggests that the existence of a relationship between government sectorial expenditure on health, agriculture and economic growth necessitates the continued use of fiscal policy instruments to pursue macroeconomic objectives in Nigeria. Also government should pay special attention to improving the level of development of human capital in Nigeria. There should be an increase in the annual investments in the education sector to at least 10% to 15% of the total budget.

keywords:

Government Sectorial Expenditure; Health; Education; Agriculture; Economic Growth

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