Analysis of Government Expenditure and Economic Growth in Nigeria

Abstract

This study examines the impact of government expenditure on economic growth in Nigeria using time series data spanning from 1980-2020. Variables used includes real gdp, government final consumption expenditure and population growth rate. Augmented Dickey Fuller and Philips-Perron unit root test for stationary of the variable, Johansen Co integration, Vector Error Correction and Granger Causality tests were estimated. Johansen co integration test result indicates the existence of long run relationship while the error corrections model reveals the absence of shot run relation among the variable. Unidirectional causality runs from population growth to economic growth and public expenditure to population growth. Base on the findings, it is recommended that Nigerian government should enhance expenditure on social welfare to improve standard of living of it citizenry