Research Article Open Access

Analysis of Government Disaggregated Expenditures and Growth of Nigerian Economy

Abstract

The study explores the relationship between government disaggregated expenditures and growth of the Nigerian economy over the period of 1970 to 2014 with a critical focus on growth analysis. Using percentage changes in government expenditures on administration, economic services, social and community services and transfers and GDP, the study employed ex-post facto research design and the required data were sourced from CBN statistical bulletin and subjected to OLS, ECM, Granger causality and Johansen co-integration methods of estimations. Utilizing the ADF statistics, the employed variables were found to be stationary at level, while the OLS revealed a short run positive association between expenditures on administration, social and community services and transfers and gross domestic product while economic services expenditure relates negatively to GDP. The study also revealed the existence of equilibrium or longrun relationship among employed variables, while the ECM was rightly signed at 92% speed of adjustment. The granger causality revealed a demand-following unidirectional relationship between GDP and expenditures on economic services. Based on this, the paper recommends among others that Expenditures on economic services should be channelled towards diversification of the economy especially in this period of dwindling oil price.

OBIAMAKA EGBO, EBELE NWANKWO, NONSO FREDRICK OKOYE, OKEKE ONUORA ESQ

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