Investigating Government Sectoral Spending and Economic Growth: Empirical Evidence from Nigeria

Abstract

This paper investigated the empirical relationship between government sectoral spending and economic growth in Nigeria following cointegration approach and ending with error correction framework. The result of the study confirms a longrun relationship between GDP and its explanatory variables which are government expenditures on Education, Health and Agriculture.  The explanatory variables conform to apriori expectation and were individually statistically significant in explaining changes in GDP. This implies that government expenditures on Education, Health, and Agriculture in Nigeria has been productive over the period covered.  Based on these findings, the study recommends among other things, that there is the need for improved and committed funding of the Educational, Health and Agricultural sectors for a more vibrant economy.

Keywords: Government Expenditure, Stabilization and Economic Growth