Abstract
The study examined the impact of capital budget expenditure implementation on economic growth in Nigeria. Specifically the study assessed the impact of implementation of capital expenditure on administration, economic services, socio-community services on the growth of Nigerian economy. Secondary data used in the study were collated from Central Bank of Nigeria (CBN) statistical bulletins, and analyzed with the use of Augmented Dickey-Fuller unit root test, co-integration test and error correction model (ECM) analysis. The long run normalized estimation reported coefficient values of -387,2292, 69.05, 184.17 for capital expenditure on administration, economic services and socio-community services respectively, while the short run parsimonious ECM estimation reported coefficient estimates and probability value of 27.20(p=0.11), -27.82(p=0.001), -17.23(p=0.49) respectively. Thus, it was concluded that capital expenditure implementation is germane in maintaining and sustaining economic growth in Nigeria. Hence, it was recommended that government should ensure adequate implementation of capital expenditure in the country especially in areas of economic and socio-community services and also overhaul ministries, government agencies and parastatals to curb and curtail loopholes impeding effective and efficient implementation of capital budget in the country.
Highlights
Budget is an important instrument of governance in any modern state
The broad objective of this study is to evaluate the impact of capital budget implementation on the economic growth in Nigeria, while the specific objectives are to assess the impact of the capital implementation of expenditure on administration on the growth of the Nigerian economy, to evaluate the impact of the capital implementation of economic services on administration on the growth of the Nigerian economy and to examine the impact of the capital implementation of expenditure on social community services on the growth of the Nigerian economy
Model Specification The study adopts an econometric model in determining the effect of capital budget implementation on economic growth in Nigeria
Summary
Budget is an important instrument of governance in any modern state. It exercises control over size and relationship of government receipts (revenue) and expenditures (payment) (Edame, 2010). These expenditures comprises of recurrent expenditures, capital expenditures, subsidies, debt servicing and so on. These expenditures often have significant impact on the economy. Ohanele (2010) further stressed that a well-functioning budget system is vital for the formulation of sustainable fiscal policy and the facilitation of economic growth. In a bid to achieve the macroeconomic goals and objectives of stable and full employment, infrastructural development among others, the national government initiates several types of budget such as surplus, balanced, deficit, supplementary, development budget; and include the line item or traditional budgeting system, performance budgeting system, planning budgeting system, programming budgeting system and the zero-based budgeting system
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