Capital Expenditure and Economic Development: Implications for Economic Planning in Nigeria

Abstract

This study examines capital expenditure and economic development: implications for economic planning in Nigeria from 1990-2020. Specifically, the study seeks to examine the effect of capital expenditure on economic growth as a prerequisite for planning, and to examine the effect of some selected sectors as a tool for planning in Nigeria. The study employs the Autoregressive distributed lag bound (ARDL) technique and descriptive statistics to address the specific objectives. The study reveals that capital expenditure significantly impact economic growth both in the short run and in the long run period. The findings of the sector also revealed that key sectors of the economy such as the manufacturing sectors, the service sector and the agricultural sector are growth enhancing sectors of the Nigerian economy. The study therefore recommends, amongst others, that Nigerian government should block all leakages through which capital expenditure is being mismanaged. Furthermore, the government should be specific in its spending and should ensure that spending plans are directed towards these sectors given that they have untapped potentials for growth stimulation and development of the Nigerian economy.