PUBLIC EXPENDITURES TREND AND THE NIGERIA ECONOMY
Keywords:
Changes in Capital Expenditures, Changes in Recurrent Expenditures, Economy, Changes in Gross Domestic Product GrowthAbstract
The study investigated how prevalent annual dynamism in the public expenditures of the government affects the Nigeria economy. Specifically, the study investigates the extent to which changes in capital expenditures level leads to changes in the gross domestic product growth in Nigeria. It also evaluated how changes in recurrent expenditures leads to changes in Nigeria’s Gross domestic product growth. Data from the Central Bank of Nigeria's Statistical Bulletins since the return of Nigeria to democratic regime (1999 – 2022) was utilized and subjected to further statistical analysis. As a result, the Ordinary Least Squares (OLS) regression method was employed to test the relevant hypotheses formulated. The findings revealed that changes in capital expenditures level, although positive but weak, do not lead to significant changes in the gross domestic product growth in Nigeria (t-statistics = 0.087074; p-value = 0.9314). It equally found out that changes in recurrent expenditures, although positive and strong, do not lead to significant changes in Nigeria’s Gross domestic product growth (t-statistics = 0.714036; p-value = 0.4827). In conclusion, while recurrent expenditure maintained a rather dramatic posture towards the nation’s GDP growth possibilities perhaps due to the high external borrowings habitually taken by successive administrations in Nigeria from time to time to run personnel and administrative costs cum high cost of governance, the size of the nation’s capital expenditure overtime has failed to demonstrate a positive effect, thus also reflecting potential inefficiencies in its implementation. The study therefore recommended that The National Assembly should conduct a review of capital expenditure projects, ensuring better planning and monitoring to enhance its contribution to GDP growth over time. Also, relevant government Agencies should increase the transparency and effectiveness of recurrent expenditures by addressing inefficiencies to unlock its full growth-contributive potential.
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