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. 9 NO. 8 2024
DOI: 10.56201/ijefm.v9.no8.2024.pg104.117

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Public Investment and Economic Growth in Nigeria

OBRIKI Precious Endurance & Ven. Prof. J.K.J. ONUORA

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Abstract

This study empirically investigated public sector investment and economic growth in Nigeria. However, in order to achieve the objectives of this study, the study utilized four explanatory variables as proxies for public sector investment indicators (education, transportation and communication, health and social and community services) while real gross domestic product was used as a proxy for economic growth in Nigeria. The study covered a time period of 1981 to 2022. The Error Correction Model (ECM) was adopted for the analysis based on the fact that the variables were stationery at levels and first difference. The Augmented Dickey Fuller (ADF) unit root tests showed that economic growth and public investment in health as well as ECM were stationery at levels while and public investment in education, transport and communication and social and community services were stationery at first difference at ADF statistics > ADF at 5%. The ECM regression results revealed public investment in education and social and community services has a positive and a significant effect on economic growth while public in transportation and communication and health has an insignificant effect on economic growth. Based on these findings, it was recommended that government through their fiscal and monetary policy tools should ensure there is huge continuous public investment in the educational sector for improving the development of the economy. It was also suggested that government should ensure there is a massive public investment in the social and community services for raising the standard living of the citizen and thereby leading to economic growth.

keywords:

Economic growth, Public Investment in Education, Public Investment in Health,

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