NEXUS BETWEEN GOVERNMENT EXPENDITURE AND ECONOMIC GROWTH: EVIDENCE FROM NIGERIA ECONOMY (1995 – 2018)

This study examined the Impact of Government Expenditure on Economic Growth in Nigerian from 1995 to 2018. The main objective is to examine the impact of government expenditure on economic growth in Nigeria. The study adopted ex-post facto research design. It used annual time series data extracted from the Central Bank of Nigeria statistical bulletin and annual report. The data collected were analyzed using multiple regression techniques of the Ordinary Least Squares (OLS) with the aid of Statistical Package for Social Sciences (SPSS). The analysis used Gross Domestic product as dependent variable. Government Capital Expenditure, Government Recurrent Expenditure and Money Supply as the independent variables. The result revealed that Government Capital Expenditure with a p-value of 0.542 which is statistically insignificant, has a negative impact on the growth of Nigerian economy. Government Recurrent Expenditure with a p-value of 0.009 which is statistically significant has a positive impact on economic growth in Nigeria. Money Supply with a p-value of 0.000 which is statistically significant, has a positive impact on economic growth in Nigeria. The study recommended that the Government should ensure that capital expenditure and recurrent expenditure are properly managed in a manner that it will raise the nation’s production capacity and accelerate economic growth. Also, Government should monitor the contract awarding process of capital projects closely, to prevent against over estimation of execution cost.