PUBLIC EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA 2014 – 2024

Abstract

This study examined the relationship between public expenditure and economic growth in Nigeria from 2014 to 2024. The main objective was to determine the effect of recurrent and capital expenditure on real Gross Domestic Product in Nigeria. The study adopted an ex-post facto research design and relied on secondary annual data sourced from the Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics, Budget Office of the Federation, and World Bank. The model was specified based on Endogenous Growth Theory and estimated using Augmented Dickey-Fuller unit root test, Johansen cointegration test, and Error Correction Model with the aid of E-Views 12. The findings revealed that capital expenditure has a positive and statistically significant effect on economic growth, while recurrent expenditure has a positive but insignificant effect. Gross capital formation and labor force were also positive and significant determinants of growth, whereas inflation had a negative and significant effect. Cointegration results confirmed the existence of a long-run relationship among the variables. The study concludes that the composition of public expenditure matters more than its size in driving growth in Nigeria. It recommends rebalancing expenditure toward capital projects, improving budget implementation, controlling inflation, enhancing revenue mobilization, and encouraging private sector participation. These measures are essential for making public spending more growth-enhancing in Nigeria.