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Impact Of Government Expenditure On Nigerian Economic Growth (1981 – 2010)
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Most growth theories like the big push theory and the balanced growth
theory among others aimed at improving the growth rate in developed
countries. This need for development is hindered by lies saving which is
a result of low aggregation income in most developing countries.
1.2 STATEMENT OF THE PROBLEM
According
to Dunnet (1990) economic growth is an increase in real per Capital
Gross National Product (GNP). Economic growth is the steady process by
which the productive Capacity of an economy is increased over time to
bring about rising levels of national output and income. Growth is an
engine of development. There can be no development without growth hence;
economic growth is desirable since it is associated with an increase in
welfare.
At the dawn of this new millennium, Africa in general
Nigeria in particular still faces monumental development like new level
of living characterised by low per capital income inequality, poor
health and inadequate education. All these are consequence of poverty.
Nigeria
present a paradox the country is rich but the people are poor. Per
capital income today in Nigeria is around the same level as 1970.
Meanwhile between 1970 and 2000 over $200 million has been earned from
the exploitation of countries resources. Nigeria is rich on land, oil,
people and natural Gas Resources, yet Nigeria has been bedevilled with
debts problems until just recently when her debt was forgiven.
Nigeria
has been classified by the World Bank as a low income developing
country. She is characterised by wide spread of poverty not less than
60% of Nigerian population are below development report (UNDP) 1988.
The
better reality of the Nigeria situation is not yet that the poverty
line is getting worse by the day but more than four ten of Nigerians
live in conditions of extreme poverty of less than ₦320 per month which
barely provide for a quarter of the nutritional requirement of health
living.
The sluggish growth of the Nigeria economy despite the
increase in government has been rather surprising since independent
according to Kweka, P. J. (1969 – 1986, 1999), government consumption
and investment expenditure in Nigeria has been on the increase. On the
other hand, has not been regular in fact it has been less static. The
decade of 1980’s is generally referred to as Africa “last decade of
development opportunities†Nigerian economy crisis in the early 80’s was
attributed to several factors including the collapse of price. The rise
in international interest rate and domestic policy mistakes.
In
order to successfully map out strategy for accelerating Nigeria’s growth
rate in the year ahead, it is necessary to fully understand the source
of economic growth in Nigeria during the past four decades, one with
notice that government expenditure in Nigeria has been on the increase.
To what extent does this increase in government spending affect the
level of growth in Nigeria? In this work, using data on Nigeria
government expenditure from 1980 - 2009, we will try to answer the
question; Does government expenditure cause the bring about in economic
growth in Nigeria?
1.3 OBJECTIVE OF THE STUDY
The objective of the study was specifically;
i. To find out if government expenditure significantly affect economic growth in Nigeria.
1.4 STATEMENT OF HYPOTHESIS
The following null hypothesis will be tested at 0.05 level of significance.
H0: Government expenditure does not significantly affect economic growth in Nigeria.
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ABSRACT - [ Total Page(s): 1 ]The work was on the impact of Government Expenditure on Nigeria Growth (1981 – 2010) dealing with secondary data from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics Regression Analysis with (OLS) technique was used. Our findings indicate that there is a positive correlation between Inflation, Money Supply, Government Consumption Expenditure. While Money Supply and LGDP-I has a positive impact on the dependent variable (GDP). But the GE (Government Expenditure) and ... Continue reading---
