Sahel International Journal of Economic and Development Studies (SIJEDS)
Government Expenditure And Economic Growth In Nigeria
Rowland M. Shedrach — College of Health Science and Technology, Michika, Nigeria
Hafiz Ismail — Department of Economics, Federal College of Education, Yola, Nigeria
* Corresponding author
Sahel International Journal of Economic and Development Studies (SIJEDS) · Vol. 1 No. 1 (2026)
· pp. 60-66
Published 29 September 2026
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Published 29 September 2026
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Abstract
This article re-examines the association between federal government expenditure and economic growth in Nigeria using annual data for 1981–2023. Capital and recurrent expenditure are extracted from the Central Bank of Nigeria 2023 Statistical Bulletin; real GDP per capita, population, the GDP deflator and inflation come from the World Development Indicators. Nominal federal spending is deflated and converted to per-capita terms. We estimate an autoregressive distributed lag (ARDL) error-correction representation, test for a level relationship using finite-sample bounds inference, and estimate a lagged annual-growth model with oil-revenue and inflation controls. The ARDL(1,1,1) bounds F statistic is 4.9317; its finite-sample upper-bound p-value is 0.0659, while a 1990–2023 subsample yields F = 0.8437. A stable long-run relationship is therefore not established at the 5% level. In the preferred 1983–2023 growth model, lagged changes in real capital and recurrent spending have coefficients of 0.0100 (p = 0.3792) and 0.0166 (p = 0.4129), respectively; the joint test p-value is 0.3685. The findings do not show a robust predictive effect of either category on next-year real GDP per capita growth. Fiscal composition, project quality and oil-revenue exposure remain central to policy, but the observational estimates do not identify causal returns to expenditure.
Keywords: government expenditure, capital expenditure, recurrent expenditure, economic growth, Nigeria, ARDL