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. 11 NO. 1 2025
DOI: 10.56201/ijebm.vol.11.no1.2025.pg149.164

---

Effects of Government Expenditure on Employment Generation: Evidence from Nigeria

Nyeche, E., Nwikina, C.G and Amadi, C.R

---

Abstract

This study empirically examined the effect of government expenditure on employment generation in Nigeria between 1988 and 2022. The study proxied employment generation by total employment while the proxies of government expenditure adopted are government expenditure on agriculture, government expenditure on education, government expenditure on health and government expenditure on construction. Time series data utilized were sourced from National Bureau of Statistics (NBS) report and Central Bank of Nigeria (CBN) statistical bulletin. The study adopted Autoregressive Distributed Lag (ARDL) technique as the main data analysis technique. The findings of this study revealed that there is long run relationship among total employment, government expenditure on agriculture, government expenditure on education, government expenditure on health and government expenditure on construction in Nigeria while government expenditure on agriculture, government expenditure on education, government expenditure on health and government expenditure on construction have positive and significant effect on total employment in Nigeria. Based on the findings, the study concluded that government expenditure plays a significant positive role in employment generation in Nigeria. The study recommended among others that government should expand government spending on construction projects, including infrastructure development such as roads, bridges, housing, and public buildings, to generate significant employment opportunities. This can absorb a large portion of the unemployed, particularly unskilled and semi-skilled workers, thereby reducing overall unemployment rates in the country.

keywords:

Total Employment, Government Expenditure, Agriculture, Education, Health

---

References:

Al-Yousif, Y. (2019). Does government expenditure inhibit or promote economic growth: Some
Empirical Evidence from Saudi Arabia. Indian Economic Journal, 48(2), 67-78.
Ebi, R. O. & Ibe, R. C. (2019). Government Expenditure and Unemployment: Examination of the
Nigerian Evidence. International Journal of Business & Law Research, 7(1), 25-33.
Nnamdi, H. (2019). Government expenditure in Nigeria: A Sine qua non for economic growth and
development. Journal of Research in National Development (JORIND), 9(2), 155-162.
Nnamdi, H. (2023). The relationship between government expenditure and employment
generation of Nigeria. Public Policy and Administration Research, 6(7), 95-106.
Egbulonu, K. G. & Amadi, K. W. (2016). Effect of fiscal policy on unemployment in the Nigerian
economy. International Journal of Innovative Finance and Economics Research, 4(3), 1-
Kemi, F. A. & Dayo, B. O. (2014). Unemployment and economic growth in Nigeria. Journal of
Economics and Sustainable Development, 5(4), 138-144.
Keynes, J. M. (1934). The general theory of employment, interest and money. New York:
Macmillan Publishers.
Nazar, D. & Tabar, M. H. (2013). Government expenditures and its impact on poverty reduction
(Empirical evidence from sistan and baluchestan province of Iran). International Journal
of Academic Research in Economics and Management Science, 2(1), 251-260.
Ndubueze, E. O., Okoli, U. V., Onwuka, I. N. & Mba, S. E. (2020). Impact of government
expenditure on unemployment in Nigeria: Evidence from Social Expenditure. International
Journal of Social Sciences and Management Research, 6(1), 61-76.
Obayori, J. B. (2016). Fiscal policy and unemployment in Nigeria. The International Journal of
Social Sciences and Humanities Invention, 3(2), 1887- 1891.
Ogar, A., Arikpo, O. F. & Suleiman, L. G. (2019). Fiscal and macroeconomic policies dynamics
in Nigeria. Global Journal of Social Sciences, 18(2), 33-51.




Ojong, M. O., Ogar, A. & Arikpo, O. F. (2016). The impact of tax revenue on economic growth:
Evidence from Nigeria. Journal of Economics and Finance, 7(1), 32-38
Okoroigwe, E.S (2024) Government expenditures and Nigeria’s economic growth:
https://SSRN.com/abstract=4692420 or http://dx.doi org/10.213/SSRN. 4692420
.Oniore, J. O. & Obumneke, E. (2014). Public expenditure growth and inflation in Nigeria: The
causality approach. Department of Economics, Faculty of Humanities, Social and
Management Sciences, Bingham University, Karu, Nigeria.
Onodugo, V. A., Obi, K. O., Anowor, O. F., Nwonye, N. G. & Ofoegbu, G. N. (2017). Does public
spending affect unemployment in an emerging market. Risk Governance & Control:
Financial Markets & Institutions, 7(1), 32-45.
Onuchukwu, O., Ofoezie, K. E. & Nteegah, A. (2006). Fiscal policy measures and macroeconomic
stability in Nigeria. Nigerian Journal of Monetary Economics, 2(1), 68-83.
Udoffia, D. T. & Godson J. R. (2016). The impact of federal government expenditure on economic
growth in Nigeria (1981-2014). Greener Journal of Social Sciences, 6(4), 092-105.
Wagner, A. (1962). Three extracts on public finance, in Musgrave R. A. and Peacock, A. T. (eds),
Classics in the theory of public finance. London: Macmillan.
Ugochukwu, L. & Oruta, G. (2021). Government expenditure and economic growth in Nigeria: A
disaggregated analysis. Path of Science, 7(11), 4022- 4035.

DOWNLOAD PDF

---

Back