Auto Regressive Distributed Lag Analysis of the Impact of Public Expenditure and Economic Growth in Nigeria

Abstract

This study examined the impact of government expenditure on economic growth in Nigeria. Time series data for twenty-two years’ period were sourced from secondary sources and Auto Regressive Distributed Lag (ARDL) model was used in estimating relationship exists among variables of interest. Real Gross Domestic Product, a proxy for economic growth was adopted as the dependent variable while Total Recurrent Expenditure and Total Capital Expenditure constituted the independent variables. The result of the study shows that the public expenditure has a positive relationship but insignificant impact on the economic growth of Nigeria for the period under study. The study recommends amongst others that government should allocate more of its resources to the priority sectors of the economy such as economic services in the form of agriculture, education, construction as well as to infrastructural development, in order to encourage the growth of the economy.