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Government Expenditure and Performance of Selected Macroeconomic Variables in Nigeria (1981 – 2018)

Author

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  • Nnamocha, P.N. (PhD)

    (Dept of Economics, Imo State University, Owerri, Nigeria)

  • Anyanwu, Austin Chinenye (PhD)

    (President/CEO, Gulftek Microfinance Cooperative Society Ltd, Owerri, Nigeria)

Abstract

This research work studied government expenditure and performance of selected macroeconomic variables (RGDP, Unemployment rate and Inflation Rate) in Nigeria from 1981 to 2018. The study made use of annual data sourced from the Central Bank of Nigeria Statistical Bulletin (2018 edition). Three models were formulated using government expenditure which was disaggregated into two components; government capital expenditure and government recurrent expenditure as independent variables for each of the selected macroeconomic variables, while economic growth (proxied by RGDP), inflation rate and unemployment rate were the dependent variables in each of the three models. Error Correction model was used in analysing the data. The findings showed that government capital expenditure had positive impact on economic growth (proxied by RGDP), and negative impact on inflation rate and unemployment rate. On the other hand, government recurrent expenditure had positive relationship with economic growth, unemployment and inflation rate. The study concluded that government expenditure has a significant relationship with the selected macro-economic growth variables i.e. real GDP, unemployment rate and inflation rate in Nigeria. Based on these findings, the study recommended that government capital expenditure being the engine of industrial development should be increased in order to build up or increase the productive capacity in the country.

Suggested Citation

  • Nnamocha, P.N. (PhD) & Anyanwu, Austin Chinenye (PhD), 2022. "Government Expenditure and Performance of Selected Macroeconomic Variables in Nigeria (1981 – 2018)," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 9(1), pages 138-150, January.
    • Handle: RePEc:bjc:journl:v:9:y:2022:i:1:p:138-150
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    References listed on IDEAS

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    1. Christophe Kamps, 2005. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 533-558, August.
    2. Muritala, Taiwo & Taiwo, Abayomi, 2011. "Government expenditure and economic development: empirical evidence from Nigeria," MPRA Paper 37293, University Library of Munich, Germany.
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