IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA


IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC GROWTH IN NIGERIA 

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Government Expenditure no doubt is an important instrument for a government to control the economy of a nation. Economists have been well aware of the effects in promoting economic growth. Anyway, the general view is that government expenditure notably on social and economic infrastructure can be growth enhancing although the financing of such expenditure to provide essential infrastructural facilities including transport, electricity, telecommunication, water and sanitation, waste disposal, education and health can be growth retarding (Olukayode, 2009).

Nowadays, the relationship between government expenditure and economic growth has continues to generate sense or controversies among scholars in economic literature (Inuwa, 2012). According to him, the nature of the impact of government expenditure on economic growth is in conclusion, and from the view point of the student researcher is still not incontrovertible. As a matter of fact, while some author or researchers believed that the impact of government expenditure on economic growth is negative or non-significant (Tuban, 2010), others believed that the impact is positive and significant *Alexiou, 2009).

The structure of Nigeria government expenditure can bawdily be categorized into capital and recurrent expenditure (Muritala 2011). The recurrent expenditure is basically government expenses on administration such as wages, salaries, interest on loans, maintenance cost, etc. However, the expenses on capital project like roads, airports, education, telecommunication, electricity, generator, etc are generally referred to as capital expenditure (Muritala, 2011).

Ironically, the effect of government spending in Nigeria in relation to the economic growth is still a puzzle and an unresolved issue. Indeed theoretically, it is an unresolved issue. Although the theoretical positions on the subject are quite diverse, the conventional wisdom is that or spending is a source of economic instability or stagnation. Empirical research does not conclusive support the conventional wisdom, a few studies report position and significant negative relationship between government spending and economic growth while others find significantly negative or no relation between an increase in government spending and growth in real output.

It is against this backdrop, the study is undertaken to empirically evaluate the impact of government expenditure on economic growth in Nigeria. 

1.2 Statement of Research Problem                

In the last decade Nigeria economy has metamorphosed from the level of billion Naira to trillion Naira on the expenditure side of the budget. The effects of this expenditure are largely unnoticeable on the citizenry (Muritola 2011). Empirically, while a positive and significant relationship between government spending and economic growth have been established, there are much significant negative or no relationship between an increase in government expenditure and economic growth, following these mixed findings, the research question below are being raised.

1.2.1 Research Questions 

1. What is the relationship between government real total capital expenditure and the economic growth in Nigeria?

2. Is there  a significant between government recurrent expenditure and the Nigerian economic growth?

3. Does the Nigerian government recurrent revenue enhance the growth of the economy?

4. What is the relationship between trade openness and the growth of the Nigerian economy?

5. How do macroeconomic variable induce government expenditure and the economic growth in Nigeria?

6. What is the relationship between government policies and the economic growth in Nigeria?

1.3 Objectives of the Study

The objective of this study is basically divided into general and specific objective. The general objective is to examine the impact of government expenditure on the economic growth Nigeria. However, the specific objective is as follows:    

1. To ascertain the relationship between government real total capital expenditure and the economic growth in Nigeria.

2. To find out if there is a significant relationship between government recurrent expenditure and Nigerian economic growth.

3. To find out if the Nigerian government recurrent revenue enhances the growth of the economy.

4. To find out the impact of trade openness on growth of the Nigerian economy.

5. To ascertain how macroeconomic variables induce government expenditure and the economic growth of Nigeria.

6. To examine the relationship between government fiscal policies and the economic growth of Nigeria.

1.4 Statement of Research Hypotheses 

In order to adequately evaluate the impact of government expenditure on the economic growth of Nigeria, the null hypotheses are used as follow:

1. Ho: Government capital expenditure does not improve the economic growth of Nigeria.

2. Ho: government recurrent expenditure does not enhance Nigerian economic growth.

3. Ho: There is no significant relationship between government recurrent revenue and economic growth of Nigeria.

1.5 Scope of the study

This study principally examines the impact of government expenditure on the economic growth of Nigeria. The impact of government capital expenditure, recurrent expenditure, recurrent revenue and other macro economic variables are critically examined under the study for the period 1990-2011 with a view to maiming inference.

1.6 Significance  of the study 

The relevance of this study cannot be over emphasized going by the present day government expenditure and the regardless of the Nigeria economic growth the Nigeria government will find outcome of the study useful in terms of knowing how best to structure yearly budgets so as to benefit the citizen and enhance the economy, policy makers no doubt will find this study very important to them. Economists and outcome of the study useful in terms of further researchers. 

1.7 Limitations of the study           

There is no study undertaken by a researcher that is perfect. The imperfection of any research is always due to some factors negatively affecting a researcher in the course of carrying out research. Thus, in this study the limitation include non-reliability of data, and the problem of the outcome of the study.  

.


TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM

Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.