AN EMPIRICAL ANALYSIS OF THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA. (1980-2013)

AN EMPIRICAL ANALYSIS OF THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA. (1980-2013)

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AN EMPIRICAL ANALYSIS OF THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA. (1980-2013)



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Description

This study examined government expenditure and its impact on economic growth in Nigeria. The main objective of the study is to find out the impact of government expenditure on economic growth in Nigeria. The study made use of secondary data which were sourced from the Central Bank of Nigeria Statistical Bulletin and World Development Index (WDI). The use of econometric model was formulated through the use of multiple regression model of ordinary least squared (OLS) to obtain the relationship between the variables in the model from 1980-2013. Findings from the analysis show that the coefficient of Government Recurrent Expenditure (GREXP) is 0.407662; recurrent government expenditure had positive and significant impact on economic growth. The coefficient of Government Capital Expenditure (GCEXP) is -0.226691; capital expenditure had negative and non-significant impact on economic growth. The coefficient of Inflation Rate (INFLR) is 0.000531; inflation rate had positive but insignificant impact on economic growth. The study concludes and recommends that government should increase recurrent expenditure (payment of wages and salary, interest on national dept, maintenance of social services, etc.) and capital expenditure mostly on issues that should attract economic growth. Funds meant for development of the Nigerian economy should be properly managed by the executive arm of government to boost employment as well as improve the wellbeing of citizens which will lead to economic growth and development.
TABLE OF CONTENTS
CHAPTER ONE: GENERAL INTRODUCTION
1.1 Background to the Study
1.2 Problem Statement
1.3 Objective of the Study
1.4 Research Hypothesis
1.5 Justification of the Study
1.6 Scope and Limitation of the study
1.7 Sources of Data/Information
1.8 Research Methodology
CHAPTER TWO: LITERATURE REVIEW AND THEORETICAL FRAMEWORK
2.1 Introduction
2.2 Conceptual issues on Government Expenditure
2.1.1 Fiscal Policies in Nigeria
2.1.2 The Role of Public Expenditure
2.3 Theoretical Framework
2.3.1 Musgrave Theory of Public Expenditure Growth
2.3.2 The Wagner’s Law/Theory of Increasing State Activities
2.3.3 The Keynesian Theory
2.3.4 The Solow’s Theory
2.3.5 Endogenous Growth Theory
2.4 Empirical Review
2.5 Limitation of the Previous Studies
2.6 Trend Analysis of Public Expenditure in Nigeria
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
3.2 Sources of Data
3.3 Re-Statement of the Hypothesis
3.4 Method of Data Analysis
3.5 Criteria for Decision Making
3.6 Model specification
3.7 Descriptions of Variables
3.8 Apriori Expectation
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Data Presentation
4.2 Data Analysis
4.3 Presentation of Regression Result
4.4 Interpretation and Evaluation of Result
4.5 Multi-collinearity Test
4.6 Evaluation Based on Economic Criteria
4.6.1 Evaluation Based on Apriori Expectation
4.6.2 Evaluation Based on Statistical Criteria
4.7 Test of Hypothesis
4.8 Discussion of Findings
4.8.1 Evaluation of Result Based on Objectives of the Study
4.8.2 Evaluation of Result Based on literature Reviewed and Theoretical Framework
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of findings
5.2 Conclusion
5.3 Policy Recommendation
REFERENCES
APPENDIX

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