GOVERNMENTS EXPENDITURES AND ECONOMIC RESUSCITATION OF NIGERIA
Keywords:
Capital Expenditure, Economic Resuscitation, Recurrent Expenditure, Real Gross Domestic Product, State Government ExpenditureAbstract
The study investigated how State governments’ expenditures affects economic resuscitation efforts being made in Nigeria. The independent variables of this study comprised State governments’ recurrent expenditures and State governments’ capital expenditure, while dependent variable was real gross domestic product. The study adopted ex-post facto and experimental research design, covering the period 1983-2023. The choice of this period range was due to its appropriateness to yield generalised robust findings. As a result, the secondary source of data collection from CBN Statistical bulletins for various years was used. The Ordinary Least Square statistical tool was utilised to test the extent to which the variation of the dependent variable was explained by the independent variables, deploying EVIEWS 10. The results of the Ordinary Least Square Model revealed that State governments’ recurrent expenditures have a positive and significant effect on the real gross domestic product of Nigeria (RGDP) of (P<.5). However, the State governments’ capital expenditures have a negative and insignificant effect on the real gross domestic product (RGDP) of (P<.5), thus creating a worrisome atmosphere regarding the hundreds of billions of naira possibly expended so far by State Governments on non-productive capital projects of no economic significance. In conclusion, it is sad to note that the recurrent expenditures decisions of State governments readily play a pivotal role as a boaster to the nation’s economy instead of the capital expenditures incurred annually at State level in Nigeria. It is expected that the recurrent expenditures of the State governments should ensure the smooth functioning of the public sector and immediate economic stimulation, even as the capital expenditures segment lay the needed foundation for sustained development and increased productivity. The study therefore recommended that the ministry of finance should maintain timely and efficient allocation of funds for recurrent expenditures to ensure continuous and effective delivery of public services, which in turn supports economic stability and growth. Also, State governments should increase and prioritize capital expenditures on key revenue generating infrastructure projects of economic significance and social services to foster long-term economic growth and development, thereby enhancing the overall productivity and competitiveness of the Nigeria economy.