Public Recurrent Expenditure and Inflation Rate in Nigeria

Wike Chituru PhD

doi:10.56201/ijefm.v11.no1.2026.pg107.121

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Public Recurrent Expenditure and Inflation Rate in Nigeria

Wike Chituru PhD

Abstract

This study examined the relationship between public recurrent expenditure and inflation rate in Nigeria. Time series data were sourced from Central Bank of Nigeria Statistical Bulletin. Inflation rate was modeled as the function of public recurrent expenditure on administration, public recurrent expenditure on economic services, public recurrent expenditure on community services and public recurrent expenditure on Transfers. Descriptive Statistics including Mean and Standard deviation and inferential statistics: regression analysis and Correlation analysis were carried out. Data analysis was run on the statistical package for social sciences 22.0 and findings presented in figures and tables while deriving conclusions and recommendations from the findings of the study. The study found that public recurrent expenditure explained 56 percent in inflation rate. Findings further revealed that public recurrent expenditure on administration is positive but not significant, public recurrent expenditure on economic services is positive but not significant, public recurrent expenditure on economic services has no significant effect on inflation rate, public recurrent expenditure on transfer is positive but not significant. The study concludes that public recurrent expenditure has positive but no significant effect on inflation in Nigeria. The study recommends that monetary and fiscal authorities should regulate public recurrent expenditure by targeting a contractionary fiscal policy which would decrease the amount of expenditure to tackle inflationary trends. Government should aim at inflation targeting that aims at a single-digit interest rate which would encourage the private sector to accumulate funds and augment government efforts in regulating stability in the economy and government should reduce public recurrent expenditure in the short-run, to control aggregate demand and inflationary pressures in the Nigerian economy.

Keywords

Public Recurrent ExpenditureInflation RateAdministrationEconomic ServicesCommunity ServicesTransfers

References

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Public Recurrent Expenditure and Inflation Rate in Nigeria

Abstract

Keywords

References

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