Effects Of Public Expenditure On Economic Growth In Nigeria: A Disaggregated Time Series Analysis

This study has examined the effect of public expenditure on economic in Nigeria for the period 1970 – 2009. The tool of analysis was the OLS multiple regression model specified on perceived causal relationship between government expenditure and economic growth. The major objective of this paper is to analyze the effect of public government spending on economic in Nigeria based on time series data on variables considered relevant indicators of economic growth and government expenditure. Therefore, time series data included in the model were those on gross domestic product (GDP), and various components of government expenditure. Analysis was based on data extracted from the Statistical Bulletin of the Central Bank of Nigeria. Results of the analysis showed that capital and recurrent expenditure on economic services had insignificant negative effect on economic growth during the study period. Also, capital expenditure on transfers had insignificant positive effect on growth. But capital and recurrent expenditures on social and community services and recurrent expenditure on transfers had significant positive effect on economic growth. Consequently, the study recommended more allocation of expenditures to the services with significant positive effect.