Abstract
This study examined the impact of government expenditure on selected macroeconomic variables from 1983 to 2017. Secondary data sourced from Central Bank of Nigeria Statistical Bulletin of various issues was used. The researcher used Gross Domestic Products and Unemployment Rate as the proxy of the dependent variables while government expenditures on education; health; and agriculture constituted the proxies for the independent variable. The analytical technique used was regression analysis of the ordinary least square (OLS) based on the Auto Regressive Distributed Lag used to analyze the data. The result revealed that government expenditure in the agricultural sector has negative and insignificant relationship with gross domestic product while government expenditure in the educational and health sectors have positive and significant relationship with Gross Domestic Products. Government expenditure in agriculture has a negative relationship with Unemployment Rate while government expenditure in education and health sectors has positive and significant relationship with Unemployment Rate. Based on our findings therefore, the paper recommended that governments direct financial expenditures on agriculture should be reduced gradually until it is eliminated; the government should sustain her expenditures in the other sectors but must work on the root causes of what happens in the educational system of the country. Keywords: Government Expenditures, Macroeconomic Variables, Gross Domestic Products, Unemployment Rate, Agricultural Sector, Educational Sector, Health Sector. DOI: 10.7176/JESD/10-14-06 Publication date: July 31 st 2020
Highlights
Government expenditures play significant roles in the effective functioning of all economies
The general objective of this study is to investigate government total expenditure and its effects on the macroeconomic variables in Nigeria using some key sectors of the Nigerian economy
4.0 Data Analysis and Results The table in the appendix show the trends of the variables over the period of study
Summary
Government expenditures play significant roles in the effective functioning of all economies. It refers to expenses incurred by government in the maintenance of herself and provision of public goods and services required to promote economic growth and improve the welfare of people in the society. Government expenditures are generally categorized into expenditures on administration, defence, internal securities, health, education, agriculture, construction, etc. Capital expenditure is generally thought of as expenditure which produces future benefits, seeing that lags could occur between the incur time and when it takes effect in the economy. Recurrent expenditure contrarily refers to spending on purchase of goods and services, wages and earnings, operations along with current grants and subsidies (typically categorized as transfer payment)
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