GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

Abstract

The research focused at how government spending affected Nigeria's economic growth from 1981 and 2025. To
be more precise, the research looked at how capital expenditures affected economic growth, how recurring
expenditures affected economic growth, and how overall expenditures affected economic development in Nigeria.
The study used an ex post facto research design. The CBN Statistical Bulletin provides secondary statistics for
the research period, which spans from 1981 to 2025. This contains data on capital expenditures, recurring
expenditures, and total expenditures as a stand-in for government spending, as well as real gross domestic product
as a measure of economic growth. The research uses descriptive statistics, correlation matrices, stationarity tests,
autoregressive distributed lag, and error correction model tests. The results of the analysis demonstrated a longterm correlation between Nigeria's economic development and government spending. The lower and upper
critical limit values at 5% are superseded statistically by the F-statistics value of 5.259. According to the longterm results, Nigeria's economic growth is positively and significantly impacted by government capital
expenditure (β1 = 0.180994, p<0.05), positively and insignificantly impacted by government recurrent
expenditure (β2 = 0.741473, p>0.05), and positively impacted by government total expenditure (β3 = 0.260034,
p<0.05). The research comes to the conclusion that government spending significantly and favourably affects
Nigeria's economic development.