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The Effects of Public Expenditure on Private Investment and Economic Growth in Nigeria

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  • Musa Success Jibrin
  • Success Ejura Blessing
  • Iyaji Danjuma

Abstract

The purpose of this study was to investigate the effects of fiscal policy on private investment and economic growth in Nigeria, the study uses a time series data from 1973 to 2012, the choice of the study period was informed by availability of data and the magnitude of the problem on the study period. We adopted two stage instrumental variable estimation methods to perform our regression analysis because of its adaptability. The results indicate that fiscal policy impacts on investment and investment plays a major role in the determination of the economic growth in Nigeria. It is from this findings that we recommend that the following three measures can be adopted accordingly;- re-examination of government spending to eventually make it complementary to investment, channeling more credit to the private sector, and finally designing appropriate policies that deal with the current high domestic public debt and budget deficit.

Suggested Citation

  • Musa Success Jibrin & Success Ejura Blessing & Iyaji Danjuma, 2014. "The Effects of Public Expenditure on Private Investment and Economic Growth in Nigeria," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(2), pages 90-97.
    • Handle: RePEc:rss:jnljee:v3i2p4
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