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Effect of Aggregated and Disaggregated Public Spending On the Nigerian Economy (1980-2015)

Author

Listed:
  • Nwaoha, William Chimee

    (Adjunct-Lecturer, Dept. of Economics, Institute of Ecumenical Education, Enugu in Affiliation with Enugu State University of Science & Technology (ESUT), Nigeria)

  • Onwuka, Onwuka Okwara

    (PhD, Lecturer, Dept. of Accountancy, Abia State University, Uturu, Nigeria)

  • Ejem,Chukwu Agwu

    (Lecturer, Dept. of Banking & Finance, Abia State Polytechnic, Aba, Nigeria)

Abstract

Using time series data, this study investigated the effect of aggregated and disaggregated public spending on economic growth in Nigeria during the period 1980 – 2015. Time series data such as aggregated expenditure proxy by total federal government expenditure (TFGE), disaggregated expenditure proxy by recurrent expenditure (REXP) and capital expenditure (CEXP,) and economic growth proxy by GDP were obtained from central bank of Nigeria (CBN) statistical bulletin. Error Correction Model (ECM) was used to estimate the model. The result of the finding revealed that the total federal government expenditure (TFGE) and capital expenditure (CEXP) exerts positive and significant influences on GDP while recurrent expenditure (REXP) has a positive and insignificant influence on GDP. This implies that the higher the public spending, the higher the GDP. The researchers therefore, recommend that for sustainable Economic Growth (GDP), federal government should increase capital expenditure by allocating more funds to the productive sector of the economy. More so, the positive contributions of public spending to economic growth necessitate the continued use of fiscal policy instruments to pursue macroeconomic objectives in Nigeria.

Suggested Citation

  • Nwaoha, William Chimee & Onwuka, Onwuka Okwara & Ejem,Chukwu Agwu, 2017. "Effect of Aggregated and Disaggregated Public Spending On the Nigerian Economy (1980-2015)," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 3(4), pages 44-53, 04-2017.
    • Handle: RePEc:arp:ijefrr:2017:p:44-53
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    References listed on IDEAS

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    Keywords

    GDP; TFGE; REXP; CEXP; ECM.;
    All these keywords.

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