Recurrent Expenditure Research Articles

Public Sector Budget Implementation and Performance: A Comparative Analysis of Southwestern States in Nigeria

The study investigated the effect of budget implementation on performance: a comparative analysis of six Southwest states in Nigeria over the period of 10 years spanning from 2012- 2021. This is done specifically to explore the effect of capital expenditure, recurrent expenditure, statutory allocation and intervention fund on per-capita income in Nigeria. Ex-post-facto research design was employed in the study because the data were obtained secondarily from National Bureau of Statistics. Data collected were analysed using descriptive statistics and regression analysis. Finding revealed that capital expenditure, recurrent expenditure, statutory allocation and intervention fund have positive and significant effect on performance in Oyo, Ogun and Lagos states respectively. It however revealed that capital expenditure and statutory allocation have positive and significant effect in Osun state, while capital expenditure and intervention fund was discovered to portrayed a positive and significant effect on performance in Ondo state, and the study further showed that statutory allocation and intervention fund have positive and significant effect on performance in Ekiti state. The implication of this result is that Lagos state as well as Ogun state and Oyo state have shown an exemplary example in its budget implementation which significantly affected performance, the role statutory allocation and intervention have been judiciously used and channeled to respective quarters in the case of Lagos, Ogun and Oyo states whereas, the reverse is the same in Ondo, Osun and Ekiti States, as such, statutory allocation and

The Nexus Between Public Revenue and Government Expenditure in Nigeria

This study examined the effect of government revenue on government expenditure in Nigeria. The study used a retrospective research design and data was obtained from a statistical bulletin from the OECD, CBN, IFRS and National Bureau of Statistics for the period 1981 to 2020. Descriptive statistics, correlation and multiple regression analysis were used to analyze the data based on SPSS 20.0 and the Advanced Excel Analytical Toolkit 2018 package. The result revealed a positive and statistically significant relationship between corporate income tax (CIT) and Government Capital Expenditure (GCE). The relationship between Value Added Tax (VAT) and Government Capital Expenditure (GCE) is also positive and statistically significant. Furthermore, CIT and VAT have been shown to have a positive and statistically significant relationship with government recurrent expenditure (GRE), respectively. Thus, the study reveals a significant relationship between government revenue and government expenditure in Nigeria. Among other things, we recommend that the government increase the number of goods on which Nigeria is subject to VAT to expand net VAT revenue as well as the collection of other indirect taxes to improve all public spending on Nigeria's economic growth - in line with Keynesian theory of expenditure and economic growth. Furthermore, in order to increase revenue for the CIT, according to Adolf Wagner's law of increasing public spending, the government must use tax money to create a favorable economic environment that stimulates high levels of industrial activity, thereby greatly affecting corporate performance and profits.

Disaggregated Impact of Government Expenditure on Economic Growth: Evidence from Nigeria

The quest to accelerate the pace of development of the economy in a bid to transform Nigeria into the group of developed economies by achieving certain macroeconomic objectives had called for increasing government expenditure in the provisions of public goods for the people and the nation. In view of the role of public expenditures on national progress and prosperity, this study empirically examined the disaggregated impact of the expenditures on economic growth in Nigeria for the period 1986-2021 using ARDL model as a tool for analysis. The important findings from the study suggest that capital and recurrent expenditures on community, social and economic services significantly boost economic growth in both short and long runs but the recurrent expenditure is negatively significant in the short run. Similarly, recurrent expenditure on community, social and economic services is also positively and significantly related with real GDP. Although capital and recurrent expenditures on administration and transfer are found to retard economic growth in the short run; they turn out to significantly enhance national output in the long run. Other findings from the study revealed that capital stock significantly promotes growth whereas labour slows down the growth across both short and long runs. The study recommends that government should lay a solid foundation and provide a workable business ground for individuals and firms. Government should also pay attention to finance growth enhancing spending categories such as infrastructure, research and development, education and health that would enhance human development in the country.

Impact of Fiscal Policy on Inflation in Nigerian Economy

This paper examines the impact of fiscal policy on inflation in Nigeria for the period 1981-2021. The study adopts autoregressive distributed lag (ARDL) bounds testing approach. The unit root results revealed that other variables apart from inflation were stationary after first difference. The bound test result shows that the variables cointegrate. The ARDL long-run result shows that oil revenue has a negative significant impact on inflation, while government recurrent expenditure and capital expenditure have positive impact on the inflation, with the impact of recurrent expenditure significant. The results further showed that the impacts of oil revenue, recurrent expenditure, and capital expenditure in long-run was also maintained in the short run. Lastly, exchange rate and total imports have negative impact on inflation, while foreign direct investment inflow has a positive impact on inflation in both long- and short-run. The government should review her fiscal policy to adjust recurrent and capital expenditure, and to reduce import by encouraging consumption of local products.

Effect of government experience on education and health: Implications on economic growth of Nigeria 1981-2021

This study analyzed government expenditure and economic growth of Nigeria for the period 1981-2021. Government expenditure was proxied with expenditure on education, health, social and community services while government total investment and net foreign trade were included as the intervening variables. Economic growth was proxied with gross domestic product. The data were analyzed using econometric procedures particularly the Auto regressive Distributed Lag (ARDL) model. The results showed that in the short run, government health expenditure exerted positive relationship with GDP which was not significant while education expenditure exerted significantly negative effect on the economy. The long run analysis revealed that government education expenditure had negative significant effect on GDP while health expenditure had positive significant effect on GDP. The intervening effects of social and community services expenditure and investment were positive but not significant while net foreign trade exerted negative effect in the model. The study concluded that government expenditure have not been appropriately channeled towards the education sector despite the amount spent on recurrent and capital expenditures to education whereas health expenditure increased growth in the economy significantly. It was recommended that government should increase budget allocations to education sector and also encourage private stake holders to invest in the education sector as well as engaging in foreign partnership in funding the health sector.

Higher Education and Africa's Economic Development: Challenges for the Nigerian Economy

The paper tried to determine the impact of higher education and Africa's economic development: challenges for the Nigerian economy. It was observed from the study that high quality and of course market relevant education is capable of providing a genuine cure to economic problems. The paper employed the Solow growth model where on the process to promote economic growth and development, factors of production like capital and labour are employed. However the efficient use of these factors (capital and labour) demands that the workers are well trained and skillful through education. This study assumes a straight forward production function in which changes in output are due to changes in the quantity and quality of inputs, economies of scale and advances in knowledge. The findings of the study suggest that some of the chosen variables conform to theoretical predictions and as such affect economic development. The researcher recommends governments can induce changes in labour demand and supply through specific labour market policies and social protection programmes and offering opportunities for workers to upgrade their skills, and offering education and training at an affordable cost, help raise a corporation's and an economy's productivity and also Educational budget allocation stakeholders should focus more on increasing capital expenditure, recurrent expenditure, and human capital development to foster economic growth in the country.

Effect of Agricultural Funding on Agricultural Output in Nigeria (1990-2020)

This study examined the effect of agricultural funding on agricultural growth in Nigeria spanning from 1990-2020. The specific objectives were to determine the effect of public capital expenditure on agricultural output in Nigeria, determine the effect of public recurrent expenditure on agricultural output in Nigeria, determine the effect of agricultural credit guarantee scheme on agricultural output in Nigeria, and the effect of Foreign Agricultural Grant on agricultural output in Nigeria. This study adopted the quasi-experimental research design. Secondary data were used in this study. Data used were gotten mainly from the publications of Central Bank of Nigeria (CBN) namely; Statistical Bulletin. The method adopted for analyzing is the Augmented Dickey Fuller test (ADF). Pre-estimation diagnostics tests were employed to check for stationarity of the data to prevent spurious regression analysis. From the regression result, it could be seen that only agricultural credit guaranteed scheme fund (ACGSF) was significant in influencing agricultural output in the period under study (1990-2020) as the probability values of its t-statistics were less than 5%, while public capital expenditure on agriculture (PCEXA), Foreign agricultural grant (FAG) and public recurrent expenditure on agriculture (PREXA) did not have any significant influence on agricultural output as the probability values of their t-statistics were greater than 5%. From the result, ACGSF had a positive and significant effect on agricultural output, meaning that a one-unit increase in funding to the ACGSF brought about (0.357068), this might be due to the ACGSF disbursed directly to farmers therefore its positive influence on agriculture output. On the contrary, FAG, PCEXA and PREXA had no significant effect on agricultural output within the period under study, this might be because these funds were not used for the purposes which were earmarked for. The study concluded that foreign agr

Impact of Government Expenditure on Economic Growth in Nigeria: 1970-2020

In this study, the impact of government expenditure on Nigeria's economic growth rate from 1970 to 2020 is analyzed. OLS was used to estimate the connection between the variables over the long run. The findings show a positive link between the Log of Gross Domestic Products (LGDP’s) log and its initial lag, which is statistically significant. The result reveals a positive association between the (LGDP) and the log of recurrent government expenditure (RGE), as well as between the (LGDP) and the log of first lag of recurrent government expenditure (RGE). A positive link exists between the (LGDP) and the log of capital government expenditure (CGE), but a negative relationship exists between the (LGDP) and the log of first (CGE). The link between the (LGDP) and the domestic debt of the federal government (LFGDD) is inverse, while the relationship between the logs of the first lag of the domestic debt of the federal government (LFGDD) is positive. The R2 determination coefficient is 0.698968. The outcome demonstrates that explanatory factors account for 70% of the variation in the (LGDP). The model is acceptable since the F-statistic 3595.905 with a probability of 0.000000 is significant at 1%. The long-term trend of the explanatory variables, which has increased since the year 1985, is linked to GDP. The outcome presented above also depicts the predicted short-run relationship. Therefore, it is recommended that government expenditure be examined and bolstered to have a positive impact on Nigeria's growth rates.

Relevance of Fiscal Illusion Proposition and Wagner Theory to Nigerian Budget Performance (Nexus among Fiscal Illusion Index, Recurrent and Capital Budget)

This paper presents an empirical analysis of the consequences of fiscal illusion for public spending outcomes in a developing country context, specifically Nigeria, over the period 1993- 2022. The presence of fiscal illusion and its main indicators are identified (measured here through deficit illusion, and degree of tax visibility, where the real burden of taxation is underrepresented to the citizen-voter). We find that the Nigerian economy reveals significant fiscal illusion as measured in above terms. Also, fiscal illusion is found to have major and positive impact on the demand for government capital expenditure and government recurrent expenditure and consequently, on real government expenditure in the economy over the chosen time period. This work demonstrated that the controversial question involving the role of fiscal illusion practices on public finances is not recent, but can be thought of as deriving from the discussion invoked by Puviani (1903) and substantially enriched by Buchanan (1960). In spite of the fact that the ‘Fiscal Illusion’ School of Buchanan and Wagner (1977) identifies higher levels of fiscal illusion promoting increasing increments in the size of the public sector, this work developed a model that predicts higher levels of fiscal illusion also decrease national economic growth rates. The government additionally creates the false illusion that public expenditures are lower than they are in reality and for this reason it is easier to maintain the illusive fiscal discipline. On the one hand, the government may cut expenditures in an ostensible way and step towards reducing the budget deficit. On the other hand, without additional procedures the government may introduce new public expenditures outside the budget and, consequently, without any special control of the law-making arm of government.

EFFECT OF HEALTH EXPENDITURE ON THE STANDARD OF LIVING IN NIGERIA

Health care expenditure is an essential component for a higher standard of living since a healthy population translates to an excellent labor force, which makes an economy function effectively. However, this is extremely difficult to achieve, especially in developing countries. Therefore, this paper examined the effect of health expenditure on the standard of living in Nigeria. Specifically, it investigated the relationship between health capital expenditure, health recurrent expenditure and out-of-pocket health expenditure, on standard of living using time series data from 1990 to 2021 and the Dynamic Ordinary Least Squares (DOLS) method was adopted in carrying out the empirical analysis. The paper found that health capital expenditure and out of pocket health expenditure had a positive but insignificant relationship with standard of living while health recurrent expenditure had a positive significant relationship with standard of living. The paper recommends that the Nigerian government should address the insignificant relationship between health capital expenditure, and standard of living by building new hospitals and clinics, buying medical equipment, and training healthcare workers. Also, government needs to prioritize allocation of adequate funds to sustain and improve healthcare services and implement policies such as tax incentives and subsidies to encourage citizens to invest more in their healthcare which will reduce out-of-pocket expenses for essential healthcare service.

Effect of Government Expenditure on Inflation in Nigeria

This study examined the effect of government expenditure on inflation in Nigeria while disaggregating expenditure into capital and recurrent. The study also examined the response of inflation to changes in government expenditure in Nigeria. Secondary data collected from the Central Bank of Nigeria Statistical Bulletin was employed for a period of thirty-eight years (i.e. 1981-2019). The Auto Regressive Distributed Lag technique was employed. For the first model explaining government capital expenditure, short run estimates reveal that in the current period, government capital expenditure has a significantly negative relationship with inflation. For government recurrent expenditure, it was established that government recurrent expenditure has a positive relationship with inflation. The impulse response test used in analyzing the effect of an unanticipated change in government expenditure (capital and recurrent) on inflation shows that the effects of the change in both cases are temporary as they are seen to revert to the mean. The study recommends that the government should maintain a good strategic balance between capital and recurrent expenditure to prevent the economy from being consumption - based.

Forecasting expenditure components in Nigeria

PurposeThis study forecasts the government expenditure components in Nigeria, including recurrent and capital expenditures for 2021 and 2022, based on data from 1981 to 2020.Design/methodology/approachThe study employs statistical/econometric problems using the Feasible Quasi Generalized Least Squares approach. Expenditure forecasts involve three simulation scenarios: (1) do nothing where the economy follows its natural path; (2) an optimistic scenario, where the economy grows by specific percentages and (3) a pessimistic scenario that defines specific economic contractions.FindingsThe estimation model is informed by Wagner's law specifying a positive link between economic activities and public spending. Model estimation affirms the expected positive relationship and is relevant for generating forecasts. The out-of-sample results show that a higher proportion of the total government expenditure (7.6% in 2021 and 15.6% in 2022) is required to achieve a predefined growth target (5%).Originality/valueThis study offers empirical evidence that specifically requires Nigeria to invest a ratio of 3 to 1 or more in capital expenditure to recurrent expenditure for the economy to be guided on growth.

The Effect of Government Expenditure on Nigerian Economic Growth: 1987 - 2017

The paper sought to know effect of Government Expenditure on Nigeria Economic Growth from 1981 – 2017. The study used secondary data from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) and adopted the Ordinary Least Square (OLS) Regression Analysis technique for analysis. The results from the analysis show that there is a positive correlation between Inflation, Money Supply, Government Consumption and Expenditure. Time Series data used in the model includes those on gross domestic Product (GDP} and other different structures of government. The Results indicate that government expenditure has a significant effect on economic growth, though the significance is a form of dependent. i.e. the form of government expenditure considered. Also, capital and recurrent expenditure have significant effect on economic growth but in varying degrees and extent. Finally, it was found out that capital expenditure would have exert positive impact on the level of economic growth but for the issue of corruption and institutional oddity in Nigeria though the intended capital expenditure is indirectly converted to recurrent expenditure somehow which has its own effect on the Economic growth.

Public Expenditure and Economic Development in Nigeria

This study empirically investigated the effect of public expenditure on economic development in Nigeria from 1970-2020. To achieve this objective theoretical, conceptual and empirical literature on public expenditure and economic development were reviewed. Public expenditure was proxied by capital and recurrent expenditure while economic development was proxied by gross domestic product and human development index. Secondary data was obtained from central bank statistical bulletin and United Nations development programme reports various years. The study adopts the used of ordinary least square regression statistical tools to test the formulated hypotheses with the aid of Eviews 10 econometric statistical software. The findings show that capital expenditure has positive and significant effect on gross domestic product in Nigeria. Empirical evidence revealed that recurrent expenditure has positive and significant effect on gross domestic product in Nigeria. Empirical evidence shows that capital expenditure has positive and significant impact on human development index in Nigeria. Empirical evidence indicates that recurrent expenditure has positive and insignificant effect on human development index in Nigeria. The study concludes that public expenditure has positive and significant effect on economic development in Nigeria. The study recommends among others that government should improved macroeconomic policies through creation of stable economic policies of low inflation and positive economic growth. The government should ensure free market supply site policies through deregulation, lower taxes, privatization and less regulation to stimulate private sector investment in Nigeria. The government should implement interventionist supply site policies through increase spending on public goods such as health care, education, public transport and massive infrastructural development. Government should ensure diversification from oil and gas to manufactu

Causality among Oil Revenue, Non-Oil Revenue, Fiscal Risk Factors and Budget Execution Phase in Relation to Debt Overhang and Crowding-Out Theories: Contending Gap Issues

We reviewed literatures on the complex causality among oil revenue, non-oil revenue, fiscal risk factors and budget execution phase in relation to debt overhang and crowding-out theory. The majority of papers surveyed study on investigated the long-run and short-run relationship between fluctuations of oil price ; direction of causality between total revenue and total government spending ; the dynamics of the tax revenue and expenditure nexus, explored the impact of oil prices volatility on the key factors of the government budget, analyse the relationship between public expenditure and debt —little research in the area of the impact of oil price fluctuations on key macroeconomics variables. The evidence provided by the empirical literature is that there are indeed heterogeneous responses to position on complex causality among oil revenue, non-oil revenue, fiscal risk factors and budget execution phase in relation to debt overhang and crowding-out theory. It is detected that most study reviewed did not disintegrated relevant revenue: oil revenue (upstream oil revenues, downstream oil revenues, petroleum profit tax(PPT)); non-oil revenue (company income tax (CIT), value added tax (VAT), personal income tax ) and budget risk factors: oil price volatility (OPV)(OPEC Spot OPV, Brent OPV, West Texas Intermediate OPV), public debt (external public debt, domestic public debt), debt servicing (external debt interest service and domestic debt interest service) on budget execution phase (public expenditure: capital budget expenditure and recurrent budget expenditure). It is recommended that research effort should be made in answering the following research questions: what is the effect of oil revenue on budget implementation (public expenditure: capital expenditure and recurrent expenditure)? How non-oil tax revenue is correlates with budget implementation (public expenditure: capital expenditure and recurrent expenditure)? Of what effect is oil price vola

Globalization–health outcomes nexus and institutional intermediation in Nigeria

PurposeThe role institutional quality plays in the rising pace of globalization and its associated health effects remain unclear in the literature. This study, therefore, empirically examined the moderating role of institutional quality on the globalization-health outcomes nexus in Nigeria, a country with a relatively weak health system.Design/methodology/approachThe study employed Dynamic Ordinary Least Square (DOLS) to estimate the empirical models. The Fully Modified Ordinary Least Square (FMOLS) and Canonical Cointegration Regression (CCR) techniques were thereafter used to check the consistency and robustness of our results. Annual time-series data spanning from 1984 to 2020 were sourced from the World Development Indicator, KOF Globalization Index, International Countries Risk Guide (ICRG) and Central Bank of Nigeria Statistical Bulletin databases.FindingsThe results revealed that overall globalization and its three dimensional components (economic, political and social globalization) adversely affect life expectancy in their separate models, but increased life expectancy significantly after their interaction with government effectiveness. Also, real GDP, health aids, government recurrent health expenditure are other determinants of life expectancy in Nigeria.Practical implicationsThe Nigerian government should put in place appropriate mechanisms directed toward building and sustaining government effectiveness. This will help mitigate the negative effects of globalization and utilize its net positive benefits to improve life expectancy in Nigeria.Originality/valueThe research is the first to comprehensively examine the moderating impact of institutional quality on the nexus between overall globalization as well as its three dimensional components (economic, political and social) on health outcomes in Nigeria.

Appraisal of Government Recurrent Expenditure Pre- and Post-Integrated Personnel Payroll Information System Implementation in Nigeria

The study appraised government recurrent expenditure pre- and post-Integrated Personnel Payroll Information System implementation in Nigeria. Government recurrent expenditure on general administration, government recurrent expenditure on education, government recurrent expenditure on defence, and government recurrent expenditure on health, formed the dependent variables of the study. The study adopted an ex-post-facto research design, covering the period between 1995 and 2019. Secondary data were extracted from the Central Bank of Nigeria Statistical Bulletin. Paired Sample T-test technique was used for the data analysis. In line with the specific objectives of the study which was to appraise the difference in the mean of government recurrent expenditure on general administration, education, defence, and health pre and post Integrated Personnel and Payroll Information System implementation in Nigeria, it was revealed that all the recurrent expenditures studied have a positive and significant difference in mean after IPPIS implementation in Nigeria. This implies that IPPIS has not been able to cutdown government recurrent expenditure in Nigeria. It is recommended therefore that the federal government should adequately monitor and utilize the money saved from recurrent expenditure due to implementation of IPPIS. They should employ more administrative staff using the money saved from eradicated ghost workers. The government should consider an upward review of the educational budget to meet up with the 26% allocation recommended by UNESCO and above. The government should monitor how the huge amount of money spent on defence was appropriated. This will help in preventing and stamping out corruption. An encompassing stakeholders’ forum in the Nigerian health sector remain essential. The national health system needs a solid administrative policy foundation that allows coordination of priorities and partnerships in the health workforce and among various stakeholders. This will help stamp out embezzlement and corruption in the system.

Effect of Government Capital Expenditure on Tourism Sector Growth in Kenya

Tourism is a vital sector of Kenya’s economy by contributing to employment, alleviation of poverty, Gross Domestic Product (GDP), foreign exchange earnings, and balance of payments surplus. Tourism is a productive economic activity that needs a stable macroeconomic environment in terms of budgetary resource allocation for sustainable and continued growth. Thus, this study sought to establish the effect of government capital expenditure on tourism sector growth in Kenya. The study adopted a causal research design using quarterly time series data from 2012 to 2021. The findings revealed that government capital expenditure (t=3.4746, p<0.05), government recurrent expenditure (t=6.1303, p<0.05), and taxation (t=2.8608, p<0.05) had positive significant effects on tourism sector growth in Kenya. The study recommends an increase in capital budgetary allocation for continued growth of the sector which is the main source of foreign revenue in Kenya.

Effects of Some Macro-Economic Variables on Agricultural Output: Implication for Food security in Nigeria (1980-2020)

The study explored the effects of some macroeconomic variables on agricultural sub-sector output: implication for food security in Nigeria (1981-2020). The study specifically looked at the effects of money supply, interest rate, inflation rate, exchange rate and government recurrent expenditure on agricultural output in Nigeria. Central Bank of Nigeria (CBN) Statistical Bulletin, index mundi and journals were used as sources for the annual time series data on the research variables for the period 1981–2019. The Autoregressive Distributed Lagged Model was used in the study. The unit root test revealed in the pre-diagnostic tests that the variables were stationary at 1(0) and 1(1). The ARDL Bound test for co-integration revealed that the variables had long-run co-integrating relationship. Additionally, empirical findings indicated that, in the short run, exchange rate, government recurrent expenditure and money supply as macroeconomic variables affected agricultural output The study recommends that since the research showed that money supply had positive effect on agricultural output, government should inprove on money supply so as to enable farmers meet up their required purchases.

Effect of Disaggregated Government Expenditures on Human Development in Nigeria

This study empirically investigated the effect of government expenditure on human development in Nigeria from 1981 to 2019. Government expenditure is proxied with government capital and recurrent expenditure on health, government capital and recurrent expenditure on education and government capital and recurrent expenditure on other social and community services while human development is proxied with human development index. The study employed ex-post facto research design and secondary data were utilized. The Secondary data were obtained from Central Bank Statistical bulletin and United Nations development programme report of various years. The study tested for stationarity, and it was found that the variables are stationary at mixed order. Based on this, the study adopted Autoregressive Distributed Lag Model as the estimation technique. The study found that government capital and recurrent expenditure on health has weak and insignificant effect on human development. The study also revealed that government capital and recurrent expenditure on education has significant positive effect on human development in Nigeria. The study likewise revealed that government capital and recurrent expenditure on other social and community services has significant positive effect on human development in Nigeria. The study concluded that government expenditure through investment in education and other social and community services influence human capital development in Nigeria positively. Thus, the study recommended amongst others that the Nigeria government should increase funding of the education sector to meet education, scientific and cultural organization minimum requirement. Government should invest more on other social and community services.