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Chidi et al
INOSR HUMANITIES AND SOCIAL SCIENCES 8(1): 60-82, 2022
©INOSR PUBLICATIONS
International Network Organization for Scientific Research ISSN: 2705-1684
Public Expenditure and Economic Growth of Nigeria
2
Nnaemeka Johnbosco Chidi, 2Ekoh Livinus Akajife and 3Uzoma Christopher
1, 2
Dept. of Educational Foundation Nnamdi Azikiwe University Awka, Nigeria.
3
Dept. of Banking & Finance Enugu State University of Science and Technology, Nigeria.
Email:Dejohnbos1@gmail.com, la.ekoh@unizik.edu.ng; christopher.uzoma@esut.edu.ng

ABSTRACT
This study sought to establish the nexus between public expenditure and economic growth
of Nigeria between 2006 – 2020, using a multiple regression model of analysis with focus on
real gross domestic product (RGDP) as the dependent variable while public expenditures on
education (PEE), health (PEH), power (PEP) and defense (PED) were independently collected
and collated from the annual reports of the CBN Statistical Bulletin. Other preliminary tests
that were carried out in this study are Unit Root, Co-integration, Error correction mechanism,
t- test and f-testsof significance. Also employed in this study are test for goodness of fit,
auto correction and normality tests.The study found a positive and significant effect of
public expenditure on education and economic growth, a negative and non-significant effect
of public expenditure on health services and economic growth, a negative but significant
effect of public expenditure on power supply and economic growth and a negative and non-
significant effect of public expenditure on defense and economic growth in Nigeria. In
conclusion, the study suggested an increase in the annual budgetary expenditure on
education and health services in line with the United Nation’s (UN) benchmark. This will have
positive and significant effect on the human capital development and reduction of poverty.
A thorough oversight function on the budgeted expenditure on power infrastructure by the
national assembly to aid production without which the economy will not grow. The study
however recommended the reduction in public expenditure on defense as Nigeria is not
known to be externally aggressed during the period under review. These recommendations
lend credence to the view of Jhingan which argues that growth could only occur when an
economy’s productive capacity increases and is in turn used to produce more goods and
services. And Mao Tse tung which advised that thrift should be the guiding principle in
government expenditure and Dalton in Emekekwue which posits that every aspect of
government expenditure in excess of what is required to preserve social order and for the
protection of the State against foreign aggression is not only a colossal waste but also unjust
imposition on members of the public.
Keywords: Public, Expenditure, defense and Economic Growth.

INTRODUCTION
It was [1,2,3], who argues that public
expenditure could be guided by some
principles that mandate officers to
exercise due diligent in the discharge of
their duties as money must not be spent
merely because it has been voted, rather,
prudence, avoidance of duplications in
public expenditure, wasteful spending and
overlapping of government functions and
activities that may result in government
funds being wasted were advocated. This
was in view that public expenditure
requires careful planning, discipline and
abiding by the plan, he further argued.
[4,5,6] maintains that the principles
guiding public expenditure requires that
financial warrant must be obtained as an
authority to incur such expenditure prior
to the committal of such public funds and
on top of that, the said public expenditure
must be made in such a way as to
maximize the welfare of the society, and
finally be guided by the principle of strict
budget discipline as all levels of
governments confine themselves to the

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limit of expenditure in the approved
estimate.
Unarguably, governments spend for
diverse reasons, including but not limited
to security; factor services; promotion of
socio-economic well-being of the citizens;
execution of economic development
programs of the nations; maintaining
political machinery and public
administration of the country; providing
advances; transfer payments and
subsidies to policy-favored persons and
groups; and servicing of internal and
external debts. Again, such expenditure is
termed a capital expenditure when it is for
acquiring or improving a relatively
permanent asset or a revenue expenditure
when the amount involved is charged to
some operating account. [7,8,9], posits
that real expenditure influences the
amount, character, direction and quality of
production in the economy, whereas
transfer payment does not in any way
influence the volume, nature or type of
production in the economy. Such public
expenditure helps in the provision of
public goods and services, so long as the
advantages of such expenditure
equilibrates the marginal social
disadvantage of raising additional funds
from individuals and institutions in that
country [10].
Government participation in the economy
stems from the need to enforce contracts,
protect property, and develop
infrastructure [11]. Also the need to live
like human beings in a civilized
community has helped to keep
governments on their toes, trying to
provide basic amenities like the provision
of schools and hospitals rather than
leaving the provision of such in the hands
of individuals, or private organizations.
Again, education has become a powerful
tool for fighting poverty and has obvious
impact on the general income of the nation
[12, 13,14, 15]. However, a country must
control both its aggregate expenditure and
its exchange rate in other to maintain both
internal and external balance. On that
premise, [16] argues that government
expenditure is expected to have a positive
impact on the pattern of goods and
services produced by the economy if not
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undermined by poor management and
fiscal indiscipline. [17], maintains that
expenditure changing and expenditure
switching policies are instruments that
bring about internal and external balance.
For clarity, in principle, World Bank
recognizes the need to protect property
and contract rights to build African
entrepreneurship, hence the emphasis has
been on specifying conditions of
deregulation and privatization in
structural adjustment programs which is
consistent with the neo - colonial notion
that impediments created by the State are
the single most important factor inhibiting
expansion of the private sector [18].
Following that notion, Nigerian
government under Ibrahim Babangida in
1986 introduced Structural Adjustment
Program. An integral part of which was the
deregulation of the economy to increase
competition and that brought about both
risks and opportunities as a consequence.
Obviously, economics is nothing other
than the behavior of individuals and
groups. Three of such included the
households, firms and governments (the
actors). These actors are important
stakeholders in the economy as they take
decisions in the economic spheres. The
exception to free market economy is the
centrally-controlled economy where all the
decisions about the allocation of resources
are taken by the government as firms and
households produce and consume only as
authorized. Economic growth has
continued to be a key macroeconomic
concept of interest among most
researchers and policy makers around the
world. The sustained interest in this
macroeconomic indicator stems from its
pivotal role in impacting other integral
segment of an economy and livelihood [19,
20]. Today, Nigeria is said to be and seen
as a developing nation in Africa despite
being richly endowed with natural
resources including energy resource.
However, her access to a large energy
deposit has proved not only a continuous
challenge to her but to international
community due largely to failure to utilize
her potential in energy source for
economic growth [21]. Economic growth is
the increase in output of an economy’s
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capacity to produce goods and services
needed to improve the welfare of the
citizens [22].Growth occurs when an
economy’s productive capacity increases,
which in turn is used to produce more
goods and services. Growth could also
mean increases over time in the real
output per capita of a country. Growth
implies a rise in the standard of living of
the people and the reduction of
inequalities of income distribution [23].
The parameter to measure output is the
Gross National Product, (GNP) or it can also
be measured by the size of a domestic
economy – the Gross Domestic Product
(GDP). [24] however, argues that GDP,
being a growth variable, could be positive
or negative, though not a very good
measure of the welfare or standard of
living of the people and not a good
barometer for assessing whether the fruits
of the growth accrue to majority of the
people in a country or within that
geographical setting. Again, being a
market – based measure, it does not tell us
about the distribution of incomes among
cadres in the society, neither does it tell us
about the technology in use in production.
Whether they are low level, middle or high-
level technologies, nor did it says anything
about the sectoral developments in the
country, in agriculture, manufacturing and
other sectors. Added to that, such
measurement index does not tell us about
the state of affairs in education, health,
power, access to credit from various
institutions, transportation, mineral
development, access to good pipe bone
water, infant mortality, ownership of
factors of production among other social
indicators, [24]. In Nigeria for instance,
records from the Budget Office shows that
of a total sum of N33.2 trillion earned in
revenue by the federal government in the
last 10 years,N29.3 trillion was spent on
recurrent (non – debt) expenditure which
approximates to 88% of Nigeria’s revenue
for the period under review. High on such
non – debt recurrent expenditure included
expenditure on personnel services,
pensions, and gratuities, service – wide
votes and overhead that consumed about
50.6% of total budget expenditure and
88.5% of revenue in the period under
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review [25]. Nigeria’s penchant for high
spending on recurrent expenditure
compared to capital expenditure is said to
be inimical to her economic growth. For
instance, report by [26] shows that except
in the years 1985 and 1986, federal
government financial allocation inclined
very strongly in favor of recurrent
expenditure in 18of 22 years of between
1970 to 1991. Another report by Human
Development Index [27] on Nigeria also
shows that unemployment hovers around
24% in the year 2020, rising from 5.3% in
2006.Life expectancy averaged around
54.69% as mortality rate was 34.25% as
inflation stood at 15.7%. Nigerian citizens
were reported to live on or below US Dollar
1.90 a day. Worse still, public
infrastructure and power supply were
reported to be in short supply while
security of lives and property were in the
lowest ebb. These led to high cost of
production and forced many
manufacturing industries to migrate to
other neighboring African countries where
they have better opportunities to ply their
trade. Evidently, huge military spending
by Nigeria government, even when there
were no external aggression speaks
volume and has been a topic for debate
both in national and international fora. It
was against that backdrop that [28] argues
that Nigeria’s defense expenditure as a
percentage of the total federal government
budgetary provision for 1974 and
1975stood at10.13% and
11.99%respectively. It however declined to
about 11.21% in 1976 but rose again to
14.69% in 1977. Even at this time of
writing, the figure was yet to drop. For
specifics and in figurative terms, in the
year 1988, expenditure on defense stood
at N1.2 billion, constituting about 0.8% of
the total GDP. It increased to N15.4 billion
in 1996, to N45.4 billion in 1999 and to
N345 billion in the year 2012 and since
then, the trend has been on the rise. This
upward trend has provoked public outcry,
resulting to public enquiry by the national
assembly. Undoubtedly, Nigeria is
primarily an energy store house,
accommodating resources such as coal,
natural gas, crude oil, solar, hydro, nuclear
and wood fuel etc. In spite of the huge
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deposit of these energy source, only four
of such sources (coal, crude oil, natural gas
and hydro) are currently utilized in
processed forms while two others (wood
fuel and solar) are used in their crude
forms for heating, cooking and lighting
[29].This has resulted to poor power
supply for productivity and growth in the
economy, given credence to [30] that there
will be an increase in government
expenditure in a condition of instability.
Nigeria is known to have been engulf in the
fight of internal insecurity with the Boko
Haram and the likes. These ugly
developments have led Nigeria to be
regarded by the United Nations (UN) as the
poverty capital of the whole world.
It was against this backdrop that this
enquiry on the effect of public expenditure
on economic growth of Nigeria was
inevitable.
Pointedly, this study was an inquisition on
the nexus between public expenditure and
LITERATURE REVIEW
Public Expenditure on Defense and Internal Security:
Adam Smith pointed out that the
protection of the society from violence and
invasion of other independent societies
and protection of every member of the
society from the oppression of every
member are some of the important duties
of the State. Security of persons and
property from domestic or foreign threats
is said to be essential for the operation of
markets and the incentives to invest and
innovate. Lack of peace and security
constitute a distortion to economic
activities that may scare away both local
and foreign investors and may result to
dearth in capital in-flow as government
attention is shifted from more productive
sectors to defense and a great disorder in
the socio-economic structure [31]. Many
countries of the world commit huge
resources to bring and maintain peace in
their communities, and in the same vein,
national and international organizations
have committed huge resources towards
bringing and maintaining peace all over
the world. For instance,[32] argues that the
United Nation (UN) spent about US
$5billion yearly on peacekeeping
operations all over the world and budgeted
US$7.84 billion for the period, July 2011 to
economic growth of Nigeria between 2006
to 2020.Specifically, the objectives were
to:
1. Evaluate the effect public spending
on education has on economic
growth of Nigeria.
2. Examine the effect public spending
on health has on economic growth
of Nigeria.
3. Ascertain the effect public
spending on power has on
economic growth of Nigeria
4. Investigate the effect public
spending on defense has on economic
growth of Nigeria.
In view of that, the work is arranged in the
following order: Section two reviews
related literature while section three
present data and method of analysis.
Sections four and five discuss the results
and conclusions/recommendations
respectively.
30 June 2012. This represents about 0.5
per cent of global military spending. The
need to maintain sustainable peace and
security in and outside their territories has
resulted in the heavy investment by some
countries in military and other law
enforcement agencies. Clearly, these
expenditure affects the economy of
nations.
Arguably, the effect military expenditure
has on economic growth of nations has
been a subject of debate for some time
now. [33] posits that military spending has
influence beyond the resources it
generates especially so when such
spending was for the facilitation of
conflicts. However, [34] argues that
certainly countries especially the
developing ones need some level of
security to deal with internal and external
threats, but these can certainly have
opportunity costs as they can prevent
money from being used for other purposes
that might improve the pace of
development. Other determinants of
military expenditure according to [35],
included but not limited to; past levels of
military expenditure, geo-strategic
consideration, the politics of the
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budgetary decision-making process,
pressure from arms suppliers,
beneficiaries and vested interests,
financial and economic factors. [36] on his
part argues that military spending defers
from most other forms of government
expenditures as it has the potential of
providing an immediate benefit in the
form of greater perceived security which
might encourage investment flows, though
such spending is a consumption item. This
Public Expenditure on Power:
The demand for energy is fast increasing
the world over. Most nations, developed or
developing are faced with energy scarcity
hence the intensive search for alternatives
and renewable sources of energy [40].
Energy has remained one of the main
factors for production. It is vital for both
developed and developing countries. The
oil crises during the 1970’s and the
abnormal increases in oil prices in 1990’s
and 2000’s justify the importance of
energy as a fundamental resource in the
economy. [41], argues that energy is
indispensable and a driving force in all
economic activities. Energy is one of the
most imperative resources used in all
production processes and this has
increased the foreign income of countries
that export energy products. Most
countries especially the less developed
countries have benefited from transfer of
technology in the process of exploration,
production and marketing [42]. The energy
industries have also provided jobs to a
good number of people who were
unemployed. There have been
improvements in infrastructure and
socioeconomic activities of communities
in the process of energy resource
exploitation. Base on the above arguments,
consistence supply of energy, thus
becomes central to economic and
infrastructural transformation of the most
Public Expenditure on Education
Education comprises expenditure by
government on the provision,
management, inspection and support of
pre-primary and secondary schools; of
universities and colleges; and vocational,
technical and other training institutions.
Also included is expenditure on the
general administration and regulation of
corroborates the argument of [37], who
eloquently argued that military activity is
an economically non-contributive activity
in the modern world because it does not
add to material well-being of people. [38]
asserts that an increase in the military
expenditure can promote economic growth
by increasing human capital capabilities
through provision of education, expansion
of aggregate demand, increased security,
but can also crowd out investment [39].
nations’ economy [43]. Thus, various
studies have been conducted on the
relationship between economic growth
and energy consumption [44]. According
to [45] energy consumption runs hand in
hand with the national product. His study
revealed that energy consumption per
capita is an important indicator of
economic growth. Continuous increase in
production in the world has increased the
need of energy, but the insufficiency of oil
and natural gas resources in the world
poses an obstruction for the sustainable
economic growth. However, Electricity
power is a secondary energy resource
obtained from the conversion of the
primary energy resources such as fossil
fuels (natural gas, oil, coal) and wind
energy. Coal has been the fuel mostly used
in electricity generation, the share of
nuclear power and natural gas in
electricity consumption has increased in
recent years, while the use of oil in
electricity generation has declined since
the late 1970s due to sharp increases in oil
prices. World net electricity generation
was 20.2 trillion kilowatt-hours in 2010
and was expected to rise 39.0 trillion
kilowatt-hours by 2040 which represent an
increase of 93%. The growth of electricity
demand in the OECD countries is slower
than in the non-OECD countries [46,47].
Evidences have shown that:
the education system; on research into the
objectives, organization, administration
and methods; and on such subsidiary
services as transport, school meals and
school medical and dental services [48,
49]. Education creates improved citizens
and helps to upgrade the standard of living
in a society, The positive social change
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that comes with it is likely to be associated individual benefits. Education as an agent
with the production of qualitative of change in many developing countries
citizenry. Education attracts higher wages including Nigeria has led to a heavy
and higher aggregate national income. It investment in it and the development of
follows naturally that if more individuals manpower. No wonder, the pressure for
are educated, the wealth of nations would higher education in many developing
rise and if there are positive externalities countries has undoubtedly been helped by
of education; national income would public perception of financial reward and
increase more than the sum of the promotion of economic growth.
Public Expenditure on Health
Health covers public expenditure on and regulation of relevant government
hospitals, medical and dental centers and departments, hospitals and clinics, health
clinics with a major medical component; and sanitation and on research and
on national health and medical insurance development. Poverty could be reduced
schemes; and on family planning and when a nation is healthy and that could
preventive care. Also included is result to a growth of such economy.
expenditure on the general administration
Theories of public Expenditures
Progressive Theory of Public Expenditure
[50] states that developmental nature of larger question of whether all cities have
society and government is an important similar budget distributions. According to
tenet of progressivism; and distribution of him, Walker set about to determine if there
expenditures or design of budget process was a distributional norm by category of
in a larger society. The theory according to municipal government expenditure.
[51], is one of the earliest attempts to Walker recognized the difficulty for
develop a positive budget theory and aids politicians and budget clerks to decide if
in the use of progressive ideals as part of one or another public object has greater
social and intellectual thought. Walker’s claims. As for [50], the developmental
purpose was to provide a theory based on nature of society and government is an
economic thought with emphasis on the important tenet of Progressivism. Ibrahim
aspect of marginal utility that will be argues that the Progressive political
tested through statistical data analysis, movement, or Progressivism, was a middle
sufficient to be descriptive. According to class reform sentiment characterized by
[52, 53, 54, 55, 56, 57], Walker also use of informed, moderate, and complex
intended that the theory will aid in thought with concerns for urban reform,
decisions for allocation of government labor and social welfare and the interest of
expenditures when it was reviewed by him consumers. Progressives felt the
in 1937 and devised a method for responsibility to organize, legislate, and
ascertaining the tendencies in distribution administer to address urban social
of expenditures. The problem of city problems. The progressive philosophy
government that drew Walker’s attention also holds a core value of a society that
according to [53] was not the distribution develops and improves with the help of
of expenditures in a single city or the way government as the agent to produce this
a city carries out the budget process, but a change.
Human Capital Theory
This theory was propounded by Holden According to account, before J. F.
and Biddle in 2016 but was reviewed by Kennedy’s assassination in 1963, he met
Walter Heller in 1960s. They discovered with Heller to look into the poverty
the reason why education was given a situation of the United States. When
central role in the federal economic policy eventually President Lyndon B. Johnson
in the USA. Prior to 1958, human capital took over, Heller shared with him,
was no more than a suggestive phrase in Kennedy’s plan to eradicate poverty and
economics and played no role in the promote economic growth through
discussions of education policy [8], education and human capital [11]. Human

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capital formation through expenditure on
education was practically linked to future
growth. Education also became a powerful
tool for fighting poverty, since there was
obvious impact on the general income of
the nation [9,18]. According to them, the
poor Americans were poor because they
Keynesian Theory
Keynes has been the most formidable and
astute theorist of public expenditure [9].
To Keynes, public expenditure is an
exogenous component that is applicable as
policy instrument to advance and
accelerate economic growth [12]. The
Keynesian theory emphasized that public
expenditure can contribute emphatically
toward economic growth and advancement
[8,9]. Along these lines, a rise in
The Wiseman Peacock Displacement Theory
The wise man peacock displacement
theory was developed by [16]. The theory
is rooted in and linked to the Wagner’s law
of expending state theory but with some
little differences. The Wiseman – Peacock
theory argued on the premise that given a
normal or ideal conditions of peace and
economic stability, there will be a relative
limit to government spending. Contrarily,
there will be an increase in government
expenditures in a condition of instability
and un-peaceful environment [20]. They
also argued that during calamitous and
crisis situation such as war, famine,
drought etc, people do not mind to pay
higher taxes and maintain that increase
intaxation permanently as far as the
situation persisted. Thus, government
expenditure overtime appears to be like
chains of plateaus disjointed by peaks
[35]. According to Wagner,
industrialization and modernization will
result to substituting public activities for
private. While all other function of the
“fractional government is shifted to the
private sector [37]. According to Wagner,
law and order function and contractual
enforcement of law and order are left with
the government and these will be on the
increase [40].
Second, there will be expansion of the
income and “culture and welfare”
expenditure due to increase in real income.
As posited by Wagner, education and
culture are two areas in which the state
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failed to work towards educational
attainment [12]. The proponents of this
theory therefore believe that education of
human capital has the capacity and
capability to eradicate poverty and bring
about national and economic
development.
government consumption is at the risk of
inciting a rise in economic variables such
as investment, employment, productivity
and profitability through a multiplier
effect on total aggregate demand. Based on
this government utilizes and improves
total interest, which affects and extends
general output subject to expenditure
multipliers [11,19].
could better be involved in their provision
[7]. The expansion in government
expenditure can always be recorded after
there have been provisions for the needs
of the people and the people are satisfied
and there is a growth in consumption
pattern of the people. This will be followed
by expansion in other activities such as
education and culture [15]. [19], thirdly the
governments have to break the powers of
natural monopolies and their activities.
The breaking of the natural monopoly
power such as in railroad, electricity, water
boards etc, will involves taken over such
ventures from the private sector
(companies) [8]. Government has to
finance the running of these huge capital
ventures and run it efficiently, hence the
increase in government expenditure [16]
one important aspect to note is that most
of the original propositions of Wagner are
not contained in the Wagner’s law based on
the general trend that he predicted.
Evidently, with the new trends of
increasing availability of data in
underdeveloped countries the law has
been subjected to series of tests while the
results are mixed and its examination are
subjected to series of rigorous and
sophisticated econometric analysis. In the
Previous research works conducted by [8]
,using cross sectional data, they found out
that public expenditure particularly in the
United States is in Jerks or step – wise
fashion instead of a smooth and
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continuous manner. They posited that if in taxes. [17], People get so used to new tax
catastrophes struck at different time burden during the crisis situation to the
leading to calamitous incidence like war, extent that even if the tax rates are reduced
famine and large scale disturbances they after the conflict, the rate does not fall
will in turn provokes the need for back to the level it was prior to the conflict.
increased public expenditure that tend to The resultant effect is a new and high
exceed accepted level of budgetary government revenue and expenditure that
allocation and make people to accept a rise replaces the old one.
Theory of Expenditure Growth
In 1978, Rostow propounded a theory on such goods. The final stage is typical of the
expenditure growth and posited that advanced economics. This stage is
income elasticity of demand for public characterized by high level per capita
services may be altered at three stage of income. At this stage the rate of public
people’s per capita income [9]. First, is the sector growth will fall because more of the
preindustrial society stage called the lower basic needs of the people must have been
stage? At the lower stage demand for satisfied. According to [8], all these stages
public service would be relatively low at do exert some level of influences on
very lower ebb. [7], the reason is that government expenditure and public sector
people’s income is channeled towards management. At the lower level, high level
satisfying their primary needs. Second, at of investment is required to ginger up
lower level of public expenditure per accelerated economic development so as
capita income begins to rise, demand for to provide the basic and necessary
public goods such as health, education, infrastructural facilities to aid economic
electricity, transport and communication, growth and break-through. There and then,
defense and the likes as supplied by the the economy demands will prompt
government will start to rise, this will force government to increase public expenditure
government to raise the expenditure on [12].
Musgrave Theory of Public Expenditure Growth
The [8] enunciates that changes income by the public sector will increase most
elasticity for public expenditure is in three importantly in the areas of health,
district but related series of per-capita education and transportation. The result is
income. One in the lower level of per capita that government will be constrained to
income, the demand for services has a gear up expenditures on those services. At
tendency to be small. The reason for this the higher level of per-capita income, most
is that such income is channeled to satisfy importantly in developed economies, once
the initial needs of the people and if these the basic needs are provided and satisfied,
per capital income strive to surpass the the rate of public expenditure do have the
level of income of the lower income habit of decreasing more and more [12].
earners, the demand for services supplied
Wagner’s Law of Expending Public Activity
This law is postulated by a German centralization of economic functions is
economist in the 19th century. He due to growing needs for economic
expressed that as per capita income grows, development vis-à-vis an increasing need
growth is witnessed in the society through for government to improve agriculture and
rapid urbanization and increase social welfare of the people. In his own
enlightenments from the people. This will opinion towards the end of his analysis,
automatically causes an increase in Wagner contends that in a situation where
relative share of public sector in national market failure is evident, government
output. To Wagner, the public’s resultant expenditure must be geared up in order to
increased in the relative share of public accentuate economic development of the
sector resulting from inevitable state [16].
The Critical – Limit Hypothesis
The critical – limit hypothesis posited that and in spite of the fact that as the case may
inflation rate would take its natural course be, the country is operating a balanced

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budget; when the share of the government perceptible high tax incidence as a result
sectorial activities have exceeds 25 % of of reduction in the level of production and
the total activity in the economy. Put in supply. Based on the above, the general
another way, if the overall economic outcome of the disparity between demand
activities of the government (public sector) and supply would hitherto increase the
reaches or surpasses the theoretical limit inflationary spiral in the economy.
of 25 percent, majority, most especially On the economic side of growth, the study
the working class will be affected due to a focused on the following:
reduction in incentives as a result of a
Harrod Domar Model of Economic Growth
This theory states that growth of an incremental capital/output ratio affects
economy is directly related to savings and growth indirectly. So that if savings ratio is
indirectly related to capital/output ratio. increased or if the incremental capital
The mathematical model concludes that output ratio is reduced, this will lead to
savings affects growth directly while the growth [33].
Kaldor Model of Economic Growth
This model formulated in 1952 by Kaldor technology, capital accumulation andthat
tries to explain that economic growth is growth in the output of a country is limited
influenced by non-economic factors like by available resources and not by demand
population growth, progress in [37].
The Solow Model of Growth
The most popular theory of economic capital. The production function is
growth is the Solow model which builds his homogeneous of the first degree. The two
model of economic growth as an factors of production, labour and capital
alternative to Harrod Domar line of are paid according to their marginal
thought without its crucial assumption of physical productivities. Prices and wages
fixed proportions in production. Solow are flexible. There is perpetual full
postulates a continuous production employment of labour. There is also full
function linking output to the inputs of employment of the available stock of
capital and labour which are substitutable capital. Labour and capital are
with the following ten assumptions: That substitutable for each other. There is
One composite commodity is produced. neutral technical progress and The saving
Output is regarded as net output after ratio is constant.
making allowance for the depreciation of
Growth – Swan Model of economic Growth
The Solow-Swan model of economic 5. The two factors of production, labour
growth postulates a continuous and capital, are paid according to their
production linking output to inputs of marginal physical productivities.
capital and labour which leads to the 6. Prices and wages are flexible.
steady state equilibrium of the economy. 7. There is perpetual full employment of
This model has some assumptions which labour.
included 8. There is also full employment of the
1. One composite commodity is produced. available stock of capital.
2. Output is regarded net output after 9. Labour and capital are substitutable for
making allowance for the depreciation of each other.
capital. 10. There is no technical progress
3. There are constant returns to scale. 11. The saving ratio is constant.
4. There are diminishing returns to an 12. Saving equals investment
individual input. 13. Capital depreciates at the constant
rate, d.
14. Population grows at a constant rate, n.

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Endogenous Growth Theory
This is an advancement to the Solow-Swan factors as against exogenous factors of the
neoclassical growth model. This growth neoclassical growth theory. In models with
theory does not simply criticize the endogenous model, what government does
neoclassical growth theory but extends it matter a lot. The Solow-Swan neoclassical
by the introduction of endogenous model explains the long-run growth rate of
technical progress that had been earlier output based on two exogenous variables:
developed by [9], among other economists the rate of population growth and the rate
in growth model [19]. The endogenous of technological progress and that is
growth theory was developed as a reaction independent of the saving rate. In models
to omissions and deficiencies in the Solow- with exogenous technical change and
Swan neoclassical growth model. It exogenous population growth, it never
explains the long-run growth rate of an really mattered what government does.
economy on the basis of endogenous
Description of Model Variables
Public Expenditure on Education
The role of education in economic growth development and for improving the
and their inter-relationship are quality of the society. Human capital
increasingly the focus of public debate theory emphasizes how education
since the era of Plato. Education has high increases the productivity and efficiency
economic value and hence, a considerable of workers by increasing the level of
part of the nation’s wealth must be cognitive stock of economically
invested for the same. Investment in productive human capability which is a
education leads to the formation of human product of innate abilities and investment
capital, comparable to physical capital and in human beings. The provision of formal
social capital, and that makes a significant education is seen as a productive
contribution to economic growth. investment in human capital, which the
Education as an investment secures proponents of the theory have considered
returns in the form of skilled manpower as equally or even more equally
that geared to the needs of development, worthwhile than that of physical capital.
both for accelerating economic
Public Expenditure on Defense
[30], argued that with increase in military insecurity problem in Nigeria, the
expenditure, economic growth can be government has seen the need to increase
promoted by increasing human capital the spending on defense of the country.
capabilities of the workforce through Nigeria’s government spending on defense
provisions of education where the military includes buying of jets, arms and
industries may provide valuable skill. ammunition, intelligent gathering etc. All
There are also externalities in defense these are expected to help the economic
spending that are crucial to economic growth of Nigeria as no foreign company
growth like the provision of road will like to invest in a country where there
infrastructure which can be used by both is insecurity problem.
the military and civilian [30]. In this era of
Public Expenditure on Health
The importance of government positively correlated with education [11].
expenditure in the process of human The provision of health is a key element of
development is not only improving a policy to promote broad-based economic
education but also improving the health of growth. The main asset of the poor is
people. Health status is conventionally clearly their labour health services,
measured by life expectancy at birth, and improve the productivity and earnings of
by child and infant mortality. Neither of workers. The burden of diseases such as
these measures reflects the extent of HIV/AIDS can slow the economic growth of
morbidity. Health indicators (nutrition, developing countries. Health is an
mobility, morbidity and height) are important tool to empower poor people

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and overcome exclusion based on gender,
location and other correlates of poverty.
Public Expenditure on Power
In spite of the huge amount of money that industries in the production of output,
the Nigerian government had expended on existing industries in Nigeria complain of
the power sector, the supply of electricity inadequate electricity supply to power
had been very erratic. From 1999 to 2015, their machines and technologies to
the government spent about $1.6b on the produce physical goods. From all these,
power sector with no noticeable this study will be anchored on the Human
improvement in the megawatts of Capital theory due largely on its emphasis
electricity generated in the country [7]. on human capital development. The work
Electricity in its usefulness and will however be complimented with other
applicability is directly needed in theories.
Data and Method
Data for this study were drawn from the collected will also be subjected to Unit
Central Bank of Nigeria Statistical Bulletin Root test (ADF) to ascertain if the time
that shows government expenditure on series variables were stationary or not. Co-
education, health, power, defense and integration, and Error Correction
Nigeria gross domestic product (GDP).In Mechanism. If the results indicate that all
order to determine the relationship that series are stationary in the first difference
exists among the variables under study, a or all series are generated by (1) process,
linear model will be specified and condition of stationarity is established or
estimated using the ordinary least square conformed [7]. An Error Correction
(OLS) techniques. It study will also adopt Mechanism is employed to ascertain the
an econometric research method to speed of adjustment from the short run
attempt to empirically examine the impact equilibrium to the long run equilibrium
government expenditure exerts on state.
economic growth in Nigeria. The data
Model Specification
The study sought to establish a nexus Where:
between economic growth and public RGDP = Real Gross domestic product
expenditure of Nigeria economy with focus PEE = Public expenditure on education
on real gross domestic product (RGDP) as PEH= Public expenditure on health
the dependent variable while public PEP= Public expenditure on power
expenditures on education (PEE), health PED = Public expenditure on defense
(PEH), power (PEP) and defense (PED) as β0= Constant
independent variables, using a multiple β1, β2, β3 and β4are the parameters to be
regression model of analysis. estimated
The relationship is functionally captured µ = stochastic term
thus:
RGDP = β0 + β1PEE + β2PEH + β3PEP + β4PED
+µt………......Eq (1).
Techniques of Data Analysis
Annualized Panel data for fourteen year make sure that all the variables are mean
period 2006 – 2020 were collated from the reverting, that is, they have constant
annual reports from the CBN statistical mean, constant variance and constant
bulletin. Other preliminary tests carried covariance. In other words, that
out were as follows: Annualized Panel data for they are
Stationarity (Unit Root) Test: The stationary. The Augmented Dickey-Fuller
importance of this test cannot be over (ADF) test would be used for this analysis
emphasized since the data to be used in since it adjusts for serial correlation. The
the estimation are time-series data. In model is specified as follows:
order not to run a spurious regression, it is RGDP = β0 + β1PEEt-1 + β2PEHt-2 + β3PEPt-3 +
worthwhile to carry out a stationary test to β4PEDt-4 +µt

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Decision Rule: If the ADF test statistic is will be estimated to know the rate at which
greater than the MacKinnon critical value the dependent variable returns to
at 5% (all in absolute term), the variable is equilibrium to the independent variable
said to be stationary. Otherwise, it is non after some levels of variations i.e to derive
stationary. the numerical value of the magnitude of
Co-integration Test: Econometrically the short run dynamics or disequilibrium.
speaking, two variables will be co- Error correction models are theoretically
integrated if they have a long-term, or driven approach useful for estimating both
equilibrium relationship between them. short-term and long-term effects of one
Co-integration can be thought of as a pre- time series on another. The term error-
test to avoid spurious regressions correction relates to the fact that last-
situations (Granger, 1986). As periods deviation from long-run
recommended by Gujarati (2004), the ADF equilibrium, the error, influences its short-
test statistic will be employed on the run dynamics. The model is specified as
residual. The model is specified as follows: follows:
µt = β2 + β1RGDPt + β2PEE + β3PEH+ β2PEP + ∆RGDPt= 0 + 1 ∆PEEt+ 2 ∆PEHt + 1 ∆PEPt+
β3PED
2 ∆PEDt +∊t
Decision Rule: If the ADF test statistics is
greater than the 5% level of significance, Decision Rule: In conducting ECM, the
accept H1, otherwise, accept H0. expected sign of the result should be
Error Correction Mechanism: If there negative. A positive ECM implies a model
exist a long run relationship (co- misspecification or an indication of
integration) among the time series structural changes and will not give us the
variables, the Error correction mechanism rate of these change in the dependent and
independent variables.
Economic Test of Significance (A prior Test)
The economic a priori test shall be The variable for federal government
conducted to enable us examine the expenditure on education is expected to
magnitude and size of the parameters have positive impact on the economic
estimate. This evaluation is guided by growth in Nigeria, whereas federal
economic theory to ascertain if the government expenditure on power is
parameter estimate conforms to expected to have negative relationship on
expectation. the economic growth in Nigeria.
1a. A Prior expectation
Variables Expected Signs
PEE +ve
PEH +ve
PEP -ve
PED -ve

Statistical Test of Significance

Under the statistical test (first-order) test
we will test for the goodness of fit, the
individual significance of each regress or
using the t-test and finally significance of
the regression model using the t-test.
Test for goodness of fit-test: we shall
make use of the coefficient of multiple
determinations R2 to find how well the
sample regression line fits the data. R2
measures how the variations in the
explanatory variable affect the dependent
variable. The value of R2 ranges between 1
and 0 (ie 0≤R2≤1). The closer to 1 the better
the fit, otherwise the worse the fit.
t-Test of Significance: It is used for
testing the significance. We shall make use
of 5% level of significance with n – k degree
of freedom and where necessary, the
probability value will be used as a rule
thumb.
Where a = 0.05 (n – k), n = number of
observation (sample size), k = total number
of estimated parameters.
f-Test of Significance: This will be used
for testing the overall significance of the

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regression model. In other words, it will be except in conjunction with other
used for testing the joint impact of the regressions. We shall use 5% level of
independent variables on the dependent significance with (k – 1) (n – k) degree of
variables. The regression might not have freedom where V1 = k – 1, V2= N - K).
influence on the dependent variable
Decision Rule:
If the computed f-ratio(f*) is compared the alternative, otherwise, the alternative
with the critical f-ratio (f0.05 ). If f*>f0.05, we hypothesis H1 will be rejected and null
will reject the null hypothesis and accept hypothesis H0 be accepted.
Econometric Test of Significance (Second order Test)
Economic test will be used for empirical regression, we will use the Durbin –
verification of the model. This will range Watson (D-W) statistics at 5% will be used
from test including autocorrelation and to test for the presence of autocorrelation
normality problem. The region of no autocorrelation
Autocorrelation: The classical linear remains:
regression model assumes that du< d* < (4-du)
autocorrelation does not exist among the Where:
disturbance terms. In order to find out du = Upper Durbin – Watson
where the error terms are correlated in the d* = Computed Durbin-Watson
Decision Rule:
If the computed value of Durbin-Watson constant variance i.e. if μ N(0,52). This is
lies within the no autocorrelation region, it one of the assumptions of the classical
means there is no presence of linear regression model. The Jargue Bera
autocorrelation problem. But if the Durbin- test will be used to test for the normality
Watson computed value lies outside the in the time series variables used. This test
regions there is the presence of will be conducted by augmenting the
autocorrelation problem. equation by adding lagged values of the
Normality Test: This test will be dependent variables.
conducted to find out if the error terms are
normally distributed with zero mean and
Decision Rule:
If JBtab(2)df is greater than JBcal in absolute values then the residual is normally distributed

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DATA PRESENTATION AND ANALYSIS
Data Presentation
Table 1b Data showing Public Expenditure on Health, Defense, Education and Power

S/N PEH (N)inB PED(N)inB PEE (N)inB PEP(N)inB RGDP ($)inB

YEAR
2006 93,378,287,231 384.92 151.723 96,392,897,254 236.1
2007 100,784,441,471 396.7 137.48 100,784,441,471 275.6
2008 70,000,000,000 444.6 200.900 70,000,000,000 337.
2009 88,471,515,074 233 221.190 88,471,515,074 291.9
2010 189,783,299,566 264 249.090 189,783,299,566 361.5
2011 86,250,646,800 348 306.300 86,250,646,800 405
2012 70,300,000,000 921.91 400.150 70,300,000,000 455.5
2013 73,159,378,866 1.055 426.530 73,159,378,866 508.7
2014 339,380,000,000 968.127 493.00 59,814,290,389 546.7
2015 347,260,000,000 388.459 392.20 5,130,000,000 486.8
2016 353,540,000,000 429.128 369.60 422,964,928,495 404.7
2017 380,160,000,000 465.87 550.00 529,337,594,442 375.7
2018 528,140,000,000 580.145 605.80 618,259,322,882 397.2
2019 372,700,000,000 592.126 620.50 679,321,443,251 448.1
2020 463,800,000,000 603.184 691.07 703,265,684,432 432.3
Source: National Bureau of Statistics, 2020
Descriptive Statistics for variables under study

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Table 2
LPED LPEE LPEH LPEP LRGDP
Mean 5.732333 5.847147 25.91958 25.63728 5.960625
Median 6.061755 5.971772 25.96915 25.29170 6.003146
Maximum 6.875363 6.538241 26.99263 27.27900 6.303900
Minimum 0.053541 4.923478 24.97176 22.35837 5.464255
Std. Dev. 1.619455 0.514688 0.794392 1.312128 0.235337
Skewness -3.121832 -0.421550 0.002716 -0.682203 -0.610070
Kurtosis 11.61312 2.003792 1.224776 3.638238 2.606937

Jarque-Bera 70.73073 1.064530 1.969656 1.418095 1.027025

Probability 0.000000 0.587273 0.373504 0.492113 0.598390

Sum 85.98500 87.70720 388.7937 384.5591 89.40937

Sum Sq. Dev. 36.71687 3.708657 8.834822 24.10354 0.775370

Observations 15 15 15 15 15
Source: E-view 9.0 software output, 2021
Table 2 contains the basic descriptive standard deviation. The tests for normality
statistics of the variables under study. The of the distribution are shown by skewness,
measure of central tendency includes kurtosis and Jacque-Bera as well as the
mean and median while the measures of associated probability values are also
dispersion are maximum, minimum and shown.

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Table 3: Summary of Unit Root Result

Augmented Dickey-Fuller

S/No Variables ADF Values 5% Critical Order of Test Result

Values Integration
1 LnRGDP -2.717179 -1.951000 I(1) Stationary at 1st
difference
2 LnPEE -7.359557 -3.548490 I(1) Stationary at
1st difference
3 LnPEH -6.448194 -3.548490 I(1) Stationary at
1st difference
4 LnPEP -2.757989 -2.481038 I(1) Stationary at 1st
difference
5 LnPED -3.025504 -2.948404 I(0) Stationary at
level
SOURCE: Author’s Compilation from E-views 9, (2020)

From the summary of unit root test, all the
variables under study are stationary at
first difference except public expenditure
on defense which is stationary at level. Not
having a stationarity time series data
indicates not having a short-run
relationship among the individual time
series data. Since the variables are non-
stationary at the same order, there is need
to conduct a co-integration test. The
essence is to show that although all the
variables are non-stationary at same level,
the variables may have a long-run
relationship, that is, the variables may be
co-integrated and will not produce
spurious result.

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The Regression Result
Table 4
Dependent Variable: LRGDP
Method: Least Squares
Date: 10/29/21 Time: 04:05
Sample: 2006 2020
Included observations: 15

Variable Coefficient Std. Error t-Statistic Prob.

C 5.001261 0.799386 6.256379 0.0001

LPED -0.007438 0.020662 -0.359970 0.7264
LPEE 0.519873 0.093491 5.560687 0.0002
LPEH -3.34E-13 3.21E-13 -1.041147 0.3223
LPEP -0.076391 0.025091 -3.044565 0.0124

R-squared 0.849409 Mean dependent var 5.960625

Adjusted R-squared 0.789173 S.D. dependent var 0.235337
S.E. of regression 0.108057 Akaike info criterion -1.351109
Sum squared resid 0.116764 Schwarz criterion -1.115092
Log likelihood 15.13332 Hannan-Quinn criter. -1.353623
F-statistic 14.10126 Durbin-Watson stat 2.639117
Prob(F-statistic) 0.000406

Source: E- views 9.0 output, 2020

Table 4 above shows the ordinary least
squares result. The regression is run on
first difference to avoid spurious results
since the variables are all stationary at first
difference. Economic growth represented
by RGDP is the dependent variable and
PED, PEE, PEH and PEP are the explanatory
variables of interest. The R2 which is a
show of the goodness of fit of the model is
85%% which means that 85% of variation in
RGDP was explained by the regressors and
about 1% of the relationship is explained
by factors not captured by the model. The
adjusted R2 79% takes account of more
number of regressors if included and it
still explains 79% variation in the
dependent variable.
The F-statistics of 14.10126, p-value =
0.000406 at critical value of 0.05 shows
that the overall regression is significant
and can be used for meaningful analysis.
The Durbin-Watson statistics (DW) value of
2.6 shows that there is no evidence of a
first order serial autocorrelation AR (1). By
rule of thumb, if there is autocorrelation of
DW stat is approximately equal to 2. This
will lead to no autocorrelation test.

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Error Correction Mechanism Regression Result and interpretation
Table 5: ECM Test Result
Dependent Variable: D(RGDP)
Method: Least Squares
Date: 08/15/21 Time: 04:22
Sample (adjusted): 2006 2020
Included observations: 10 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

D(PEE) 0.446161 0.164368 2.714411 0.0111

D(PEH) 0.037481 2.113264 0.017736 0.9860
D(PEP) 4.915062 1.414490 3.474794 0.0016
D(PED) 18.48580 10.27781 1.798613 0.0825
ECM(-1) -0.322693 0.301787 -1.069274 0.2938

R-squared 0.191063 Mean dependent var 1557.240

Adjusted R-squared 0.079486 S.D. dependent var 1532.667
S.E. of regression 1470.493 Akaike info criterion 17.55964
Sum squared resid 62708124 Schwarz criterion 17.78410
Log likelihood -293.5138 Hannan-Quinn criter. 17.63618
Durbin-Watson stat 1.940502

From the test result above, the coefficient returns to equilibrium to the independent
of the ECM is -0.322693 which in absolute variable after some levels of variation.
term is the magnitude of the short-run This shows a very low speed of adjustment
dynamics. Therefore -0.322693 x 100 =32% to equilibrium after a shock.
is the rate at which the dependent variable
Test of Hypotheses
The test of hypothesis was carried out as 2. Step 2: Statement of decision criteria
follows: 3. Step 3: Presentation of test result
1. Step 1: Re-statement of the hypothesis 4. Step 4: Decision
in the null and alternate forms
Test of Hypothesis One
Step 1.- Restatement of the Hypothesis in economic growth of Nigeria
Null and Alternate forms: Ha1: There is positive and significant
Ho1: There is no positive and significant impact of public spending on Education
impact of public spending on Education on the
on the economic growth of Nigeria.
Step 2- Statement of Decision Rule
Reject the null hypothesis (H0), if the t- accept the null hypothesis and reject the
statistics is>2.5 and if p-value of the t- alternate hypothesis.
statistics is less than 0.05. Otherwise
Decision
Using table 4; the decision criterion is not positive coefficient of 0.519873 and the
to reject the null hypothesis if the probability value of t – statistics of
probability of t - statistics is > 0.05 level of 0.0002> 0.05 level of significance;
significance. Otherwise reject the null therefore, we do not reject the null
hypothesis and accept the alternate hypothesis but conclude that public
hypothesis accordingly. Table 4 shows a

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spending on education has a positive and
significant effect on RGDP in Nigeria.

Hypothesis Two
Restatement of the Hypothesis in Null and Ha2: There is a positive and significant
Alternate forms: impact of public spending on power on
Ho2: There is no positive and significant economic growth of Nigeria
impact of public spending on power on
economic growth of Nigeria
Step 2- Statement of Decision Rule
Reject the null hypothesis (H0), if the t- accept the null hypothesis and reject the
statistics is>2.5 and if p-value of the t- alternate hypothesis.
statistics is less than 0.05. Otherwise
Decision
Using table 4; the decision criterion is not probability value of t – statistics of
to reject the null hypothesis if the 0.0124> 0.05 level of significance;
probability of t - statistics is > 0.05 level of therefore, we do not reject the null
significance. Otherwise reject the null hypothesis but conclude that public
hypothesis and accept the alternate spending on power has a negative and
hypothesis accordingly. Table 4 shows a significant effect on RGDP in Nigeria.
negative coefficient of -0.07639and the
Hypothesis Three
Restatement of the Hypothesis in Null and Alternate forms:
Ho3: There is no positive and significant Ha3: There is a positive and significant
impact of public spending on health on impact of public spending on health on
economic growth of Nigeria. economic growth of Nigeria.
Step 2- Statement of Decision Rule
Reject the null hypothesis (H0), if the t- accept the null hypothesis and reject the
statistics is>2.5 and if p-value of the t- alternate hypothesis.
statistics is less than 0.05. Otherwise
Decision
Using table 4; the decision criterion is not probability value of t – statistics of
to reject the null hypothesis if the 0.3223< 0.05 level of significance;
probability of t - statistics is > 0.05 level of therefore, we reject the null hypothesis
significance. Otherwise reject the null and conclude that public spending on
hypothesis and accept the alternate Health has a negative and non-significant
hypothesis accordingly. Table 4 shows a effect on RGDP in Nigeria.
positive coefficient of -3.34E-13and the
Hypothesis Four
Restatement of the Hypothesis in Null and Alternate forms:
Ho4: There is no positive and significant Ha4: There is a positive and significant
impact of public spending on defense on impact of public spending on defense on
economic growth of Nigeria economic growth of Nigeria.
Step 2- Statement of Decision Rule

Reject the null hypothesis (H0), if the t- accept the null hypothesis and reject the
statistics is>2.5 and if p-value of the t- alternate hypothesis.
statistics is less than 0.05. Otherwise
Decision
Using table 4; the decision criterion is not hypothesis accordingly. Table 4 shows a
to reject the null hypothesis if the positive coefficient of -0.007438and the
probability of t - statistics is > 0.05 level of probability value of t – statistics of
significance. Otherwise reject the null 0.7264< 0.05 level of significance;
hypothesis and accept the alternate therefore, we do reject the null hypothesis

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and conclude that public spending on
defense has a negative and non-significant
effect on RGDP in Nigeria.
Discussion of Findings
The Effect of Public Expenditure on Education and Economic Growth of Nigeria
There is a positive and significant effect of which is greater than the p-value figure of
government spending on education and 0.0002.This is in agreement with the result
economic growth. The statement was as obtained by the studies as conducted by
confirmed by the t-test result of 0.519873 [8], using ordinary least square method.

The Effect of Public Expenditure on Health and Economic Growth of Nigeria

There is a negative and non-significant greater than p- value of 1.96. The finding
effect of public spending on health was in agreement with that of [8] on the
services and economic growth of Nigeria. impact of government spending on health
The statement was confirmed to be true and economic growth of Nigeria.
from the t-test result of 7.856021 which is
The Effect of Public Expenditure on Power and Economic Growth of Nigeria
There is a negative but significant effect of 6.7649 which is greater than 1.96. The
government spending on power and result was in line with that of [8] on the
economic growth of Nigeria. The statement impact of government spending on power
was confirmed by the t-test result of and economic growth of Nigeria.
The Effect of Public Expenditure on Defense and Economic Growth of Nigeria
There is a negative and non-significant which is less than 1.96. It is in agreement
effect of government spending on defense with that of [17] on the impact of
and economic growth of Nigeria. This was government spending on defense and
confirmed by the t-test result of -1.910354 economic growth of Nigeria.
Summary of Findings, Conclusion and Recommendations
Summary of Findings
Based on the specific Objectives of the significant effect on the growth of
study, the following are the specific Nigerian economy.
findings: 3. Public Expenditure on Power had a
1. Public Expenditure on Education negative but significant effect on
had a positive and significant effect the growth of Nigerian economy.
on the growth of Nigerian economy. 4. Public Expenditure on Defense had
2. Public Expenditure on Health a negative and non-significant
services had a negative and non- effect on the growth of Nigerian
economy.
CONCLUSION AND RECOMMENDATIONS
In conclusion, the study suggested an aggressed during the period under review.
increase in the annual budgetary These recommendations lend credence to
expenditure on education and health the view of [13,14] which posit that every
services in line with the United Nation’s aspect of government expenditure in
(UN) benchmark. This will have positive excess of what is required to preserve
and significant effect on the human capital social order and for the protection of the
development and the reduction of poverty State against foreign aggression is not only
as education is said to be a powerful tool a colossal waste but also unjust imposition
to fight poverty since it has obvious on members of the public, and [15] which
impact on the general income of the nation argues that growth could only occur when
[9,14,18]. Again, power supply should be an economy’s productive capacity
improved upon as to increase productivity increases and is in turn used to produce
which in turn will lead to economic growth. more goods and services. And [9] which
In the same token, public expenditure on advised that thrift should be the guiding
defense should be castigated downwards principle in government expenditure.
as Nigeria is not known to be externally

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