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An Empirical Analysis Of The Impact Of Government Expenditure On Economic Growth Of Nigeria (1980–2011)
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1.2 STATEMENT OF PROBLEM
The size of government expenditure and its
effects on long-run economic growth and vice versa has been as issued of
sustained interest for decades.
According to Dunnet (1990) economic growth is an increase in real per capita gross national product (GNP).
Economic
growth is the steady process by which the productivity capacity of an
economy is increased over time to bring about rising level of national
output and income.
Growth is an engine of development, there can be
no development without growth hence, and economic growth is desirable
since it associated an increase in welfare.
At the new dawn of
millennium Africa in general and Nigeria in particular still face
monumental development like low level of income characterized by low per
capita income, inequality, poor health and inadequate education. All
this are consequences 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 between1970-2000 over 200million dollars has been earned from the exploitation of countries resources.
Nigeria is rich in land, oil, people and natural gas resources, yet Nigeria has been bedeviled with debts problem.
Nigeria
has been classified by the World Bank as a low developing country. She
is characterized by the wide spread poverty not less than 60% of
Nigerian population are below poverty line according to the united
national development report (UNDP) 1998.
The better reality of the
Nigerian situation is not yet that the poverty line is getting worse by
the day but more than fourteen of Nigerians live in condition 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 Nigerian economy despite the increase in government expenditure 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, the GDP growth rate of Nigerian economy
has not been regular; in fact it has been less static. In order to
successfully map out a strategy for accelerating Nigeria’s growth rate
in the year ahead it is necessary to full understand the sources of
economic growth in Nigeria during the past four decades. One will notice
that government expenditure in Nigeria has been on the increase.
1.3 OBJECTIVE OF THE STUDY
1. To find out if government expenditure significantly affects economic growth in Nigeria.
2. To find the causality direction of the relationship between government expenditure and economic growth in Nigeria.
1.4 STATEMENT OF HYPOTHESIS
The following null hypothesis will be tested at 5% level of significance.
1. H0= government capital expenditure has no impact on the Nigerian economy.
2. H0= government recurrent expenditure has no significant impact on the Nigerian economy.
3. H0=there is no direction of causality between gross domestic product and government expenditure.
1.5 SIGNIFICANCE OF THE STUDY
This
study has much significance on household, stakeholders and no
government as a whole, because economic growth is an engine of the
economy.
i. This research will serve as a research as a references on
the other researcher who may carryout research work in this field of
study.
ii. This research would help Nigerian government and her policy makers to restore fiscal discipline in Nigeria.
iii. This study would help in the debt management in Nigeria.
1.6 SCOPE AND LIMITATION OF THE STUDY
In
any research study of this nature, there is normally the enthusiasm to
touch as many areas as possible which are connected to the various needs
of such study.
However due to the nature and scope of the work, such
a wild scope is out of the question since a work of this nature can
hardly achieve a feat.
This study will examine mainly the Impact of
government expenditure on economic growth of Nigeria covering the period
1980 to 2011.
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ABSRACT - [ Total Page(s): 1 ]The study investigates the impact of government expenditure on economic growth of Nigeria from the period 1980-2011. The objective was set to address the problem of utilization of revenue targeted to improving the economic condition of Nigeria. The review of theoretical and empirical literature provided a basis for the selection and specification of model which was used to show if government capital and recurrent expenditure has positive or negative impact on economic growth. The data were got f ... Continue reading---
