EMPIRICAL ANALYSIS OF PUBLIC EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA
Onuorah, A. C.
EMPIRICAL ANALYSIS OF PUBLIC EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA
Onuorah, A. C.
Empirical evidence tends to reject the prediction of neoclassical models that fiscal policy cannot affect growth in the
long run. However, the results are far from conclusive. This paper aimed at the trend and empirical analysis of
public expenditure and its impact on the economic growth in Nigeria. Unit root approach (ADF) was used to
investigate the stationarity of the variables. Johansen Co-integration revealed that RGDP, RGPE and RTRF
are cointegrated atmost1* with at least 2 cointegrating equations at 5% level. The graphs showed that the growth
rates had been unstable over the years and the exogeneous variables decreasingly explained the variation in RGDP
by 4%. The VEC result indicated that RGPE established long run relationship with RGDP at 5%. Finally, there
is no statistical significance between public expenditure variables and the economic growth in Nigeria. The study
recommended that government should embark on realistic policy implementation with sincere fiscal and monetary
policies in place that can monitor to greater extend and help in the sustainability for remarkable growth to be
recorded in the Nigeria.