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Government expenditure and service sector growth in Nigeria

Author

Listed:
  • Nwosa Philip Ifeakachukwu

    (Department of Economics, Faculty of Social Sciences, Federal University Oye-Ekiti, Nigeria)

  • Tijani Semira Olajumoke

    (Department of Economics, Faculty of Social Sciences, Federal University Oye-Ekiti, Nigeria)

Abstract

Aim/purpose – This study aims at examining the contribution of government expenditure on service sector growth in Nigeria for the period 1970 to 2017. The service sector and government intervention are vital to economic growth of any country, hence this study. Design/methodology/approach – The study utilised the co-integration and the error correction modelling techniques. The study also conducted the stationarity tests. Findings – The regression estimates showed that government expenditure had negative and significant impact of service sector growth in Nigeria. Research implications/limitations – The implication of the findings of this study is that government expenditure over the years has not contributed positively to enhance the growth of the service sector; the study therefore recommends the need for completion of various abandoned and on-going infrastructural projects, such as road construction, water provision and electrification projects, which are vital to the growth of the service sector. Moreover, the government can through the monetary authority issue directives deposit money in banks to give loans at a reduced interest rate to investors in the service sector. Originality/value/contribution – This study has been able to show that there is the need for greater financial commitment of the government in order to improve the growth of the service sector.

Suggested Citation

  • Nwosa Philip Ifeakachukwu & Tijani Semira Olajumoke, 2020. "Government expenditure and service sector growth in Nigeria," Journal of Economics and Management, Sciendo, vol. 40(2), pages 74-90, June.
    • Handle: RePEc:vrs:jecman:v:40:y:2020:i:2:p:74-90:n:5
    DOI: 10.22367/jem.2020.40.04
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    References listed on IDEAS

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    1. Louis Chih-hung Liu & Chiehwen Ed Hsu & Mustafa Z. Younis, 2008. "The association between government expenditure and economic growth: granger causality test of us data, 1947-2002," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 20(4), pages 439-452, March.
    2. Arusha Cooray, 2009. "Government Expenditure, Governance and Economic Growth," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(3), pages 401-418, September.
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    Keywords

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    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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