FEDERAL GOVERNMENT EXPENDITURE ON ADMINISTRATION AND IT’S EFFECT ON THE NIGERIAN ECONOMY (1997-2021)

Abstract

The study examined the Federal government expenditure on administration and its effect on
the Nigerian economy (1997-2021).The cost of administration in Nigeria has been on the
increase over the years to the extent that concerned citizens are apprehensive about its effect
on the nation’s economy. The objectives of the study are to determine the effect of recurrent
administrative expenditure and capital administrative expenditure on the Nigerian
economy, using Vector Autoregressive and Granger Causality Test. The findings made from
the results reveals that cost of administration (represented by recurrent administrative
expenditure) has a negative effect on gross domestic product in Nigeria. The study also
reveals that cost of administration (represented by capital administrative expenditure) has
a positive effect on gross domestic product in Nigeria. Based on the findings of this study,
the following recommendations are made ; the need to reduce recurrent administrative
expenditure to a sustainable level through reducing irrelevant expenses, as well as, making
capital spending more effective. Regulatory authorities in Nigeria should ensure that all
salaries and allowances of civil servants, public servants including political office holders
conform to appropriate process. Capital expenditures on administrative services should
receive more attention, and expenditures should focus primarily on productive economic
activities, to stimulate activities in the economic sectors for effective growth in RGDP.