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. 3 NO. 6 2017

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Public Education Expenditure and Economic Growth in Nigeria

Inimino, Edet Etim, Tubotamuno, Boma and Shaibu, David Ojochegbe

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Abstract

The paper examined the impact of public education expenditure on economic growth in Nigeria from 1980 to 2015. Co-integration/Error Correction Mechanism and Granger Causality test were employed to analyze the data. In analyzing the data for this study, it was observed that all the variables were stationary at their first differences using Augmented Dickey-Fuller unit root test. The Co-integration test revealed that there is a long-run relationship among the variables. The result of the parsimonious ECM showed that the overall model is satisfactory given the coefficient of determination of 65 percent and f- statistic of 5.312802. The result also revealed that government capital education expenditure and government recurrent education expenditure have significant relationship with economic growth. Meanwhile, there is no significant relationship between gross capital formation and economic growth. Moreover, the Pairwise Granger Causality result showed a unidirectional causation between government capital education expenditure and real gross domestic product, government recurrent education expenditure and real gross domestic product as well as gross capital formation and real gross domestic product. Based on these findings, the study recommended amongst others that: government should carry out capital projects in the educational sector including building of quality class rooms, laboratories, purchase of teaching and learning aids including computers because these facilities will have multiplier effect on the economy. Government should begin implementation of UNESCO’s recommendation of 26 per cent of the country’s annual budget allocate to educational sector. Also, in order to increase the morale of the teaching and non-teaching workforce for efficiency, a good salary scheme and incentives should be implemented by the government

keywords:

Public Expenditure, Education, GDP, Causality, UNESCO, Co-integration and ECM.

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