Public Expenditure and Economic Growth in Nigeria (2001 - 2021)

Abstract

The study attempts to establish the relationship between government spending and GDP in Nigeria from 2001 to 2021. The multiple regression analysis's ordinary least squares (OLS) method was employed. The econometric research shows that the independent variables (recurrent spending, capital expenditure, domestic debt, foreign debt, and exchange rate) have a positive connection with the dependent variable GDP. The OLS findings also show that the overall model accounts for over 94.98% of the changes in the dependent variable (R2 = 0.9498). This means that the variable will have a considerable impact on the GPD. The study suggests that there is an urgent need to instill fiscal discipline in government expenditure by initiating effective internal control measures and more proactive economic management coordination and implementation, as well as discouraging all known productive activities and expenditures at all levels of government. There is also a need for the government to ensure that its expenditures are channeled appropriately to sectors such as infrastructure development in order to boost investment and output, with the expected outcome of price stabilization.