Impact of Federal Government Capital Expenditure on the Economic Growth in Nigeria

ABSTRACTThis study investigates the impact of Federal Government Capital expenditure on theeconomic growth in Nigeria over a period from 1993 to 2023, with particular focus ondisaggregated and capital expenditures analysis. Government expenditures are verycrucial instruments for economic growth at the disposal of policy makers indeveloping countries like Nigeria. The objective of this study is to determine theimpact of government expenditure on economic growth in Nigeria using ErrorCorrection Model (ECM). The study used Ex-post facto research design and appliedtime series econometrics technique to examine the long and short run effects of publicexpenditure on economic growth in Nigeria. The results indicate that TotalExpenditure Education is highly and statistically significant and have positiverelationship on economic growth in Nigeria in the long run. The result has animportant implication in terms of policy and budget implementation in Nigerian. Weconclude that economic growth is clearly impacted by factors both exogenous andendogenous to the public expenditure in Nigeria. It is therefore recommended that,there is need for government to reduce its budgetary allocation to recurrentexpenditure on education and place more emphasis on the capital expenditures so asto accelerate economic growth of Nigeria and that Government should direct itsexpenditure towards the productive sectors like education as it would reduce the costof doing business as well as raise the standard living of poor ones in the country.KEYWORDS: Error Correction Model, Education, Economic Growth, CapitalExpenditure,