Subnational Government Expenditure and Economic Growth in Nigeria’s South-South Region: A Disaggregated Approach

The study aims to empirically examine the contribution of subnational government expenditure to economic growth in South-South Nigeria. Existing studies on the relationship between government expenditure and economic growth yield conflicting results, primarily concentrating on developed economies and often at the central level. This study examines the functionality and composition of public spending in South-South Nigeria from 2000 to 2023. This study aims to identify the components of government expenditure that influence economic growth, utilizing panel data from South-South Nigeria to inform policy formulation. This study conducted both descriptive and econometric inferential analyses. The econometric analysis involved disaggregating total government expenditure to examine the impact of various components of public spending on economic growth. The research utilized secondary data. The study found that, overall, the effects of capital and recurrent expenditures on economic growth are minimal. Capital and recurrent expenditures have not substantially fostered economic growth across the States. Therefore, enhancing financial transparency and accountability at a subnational level is essential for optimizing growth.