Government spending on infrastructure and economic growth in Nigeria

Abstract

This study aims to investigate government spending on infrastructure. Both primary and secondary data are used for the study. The secondary data comprise of reported annual spending on selected infrastructure and annual Gross Domestic Products for 1980 to 2016 for Nigeria. The data treatments used for the secondary data are unit root and co- integration tests using Augmented Dickey–Fuller and Phillip–Perron model. Weighted least square was used to test the sample of 37-year annual time series using vector error correction model. For the primary data, a sample of 242 respondents is utilised for the study. Statistical random sampling was used for the sample selection. The data analysis was done with descriptive statistics. Findings from the study indicate that government spending on transport and communication, education and health infrastructure has significant effects on economic growth; spending on agriculture and natural resources infrastructure recorded a significant inverse effect on economic growth in Nigeria. An element of fiscal illusion was observed in the government spending on agriculture and natural resources indicating that government is not contributing as much as the private sector in spending on agriculture and natural resources infrastructure in Nigeria.