Government Expenditure and Economic Growth in Nigeria 1970-2022: ARDL APPROACH
Abstract
The study examined the effect of public sector expenditure on economic growth in Nigeria for the period 1970-2022 based on data obtain from central bank annual bulletin and world bank and using auto regressive distributive Lag to determine the short run and long run effects of the variable of study. Kernel test was conducted for normality of distribution of data set. the test for stationarity of the data series was performed using two different methods namely, the Augmented Dickey Fuller (ADF) and the Kwiatkowski-Phillips-Schmidt-Shin (KPSS) procedure. While the ADF test is an indirect process of testing for unit roots, the KPSS tests are more direct in terms of the null hypothesis. Recurrent expenditure and total expenditure have significant positive long run impacts on gross domestic product in Nigeria, the effect of capital expenditure is insignificant. Long run effects of public expenditure on economic growth is generally different from the long run effects. It was recommended that government should increase spending in recurrent expenditure to boost economic growth
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