An Empirical Analysis of the Structure and Growth of Federal Government Expenditure in Nigeria.

Abstract

This study attempts to examine empirically the structure and growth of federal government expenditure in Nigeria. Since 1970, the federal government expenditure has continued to grow; prompting argument as to what is responsible for the continuing growth in the structure of government expenditure. Plethora of factors have been identified as possible factors causing government expenditure growth, hence the need to conduct an investigation to ascertain this for Nigeria. Time series data for the period 1970 to 2009, was used in the study. The ordinary least squares (OLS) regression technique was employed as the main method of data estimation. The results obtained revealed that factors such as fiscal deficit, Gross Domestic product, Government revenue and debt servicing are some of the factors causing growth in the government expenditure in Nigeria for the reference period. It is therefore recommended that government should maintain sound fiscal discipline, prevent double-digit inflation, and ensure productive use of revenue and increasing productivity to help reduce government expenditure growth in Nigeria.

Keywords: Federal government expenditure, Government revenue, GDP, OLS, Fiscal deficit.

JEL Classification: B22, C22, F65, H53.