Government expenditure, fiscal sustainability and economic development in Nigeria
Keywords:
Economic Development, Fiscal Sustainability, Government ExpenditureAbstract
There are reoccurring questions as to how and whether governments have fully utilized expenditures earmarked for economic development. “There are arguments that low tax structure and fluctuations in government revenues; due partly to international oil price volatility has impacted negatively on the level of socioeconomic and infrastructural development in Nigeria, mainly because of increased uncertainty and erosion of budgetary planning and implementation. Nonetheless, there seem to be disconnecting between government expenditure and the level of economic development in the country. In view of this, this study examined the impact of government expenditure, fiscal sustainability on economic development in Nigeria using time series data covering 1981 to 2022 collected from the Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics and world bank data. The study adopted a multiple regression analysis based on the Autoregressive Distributed Lag (ARDL) model as its analytical technique. The result showed that government expenditure as a ratio of gross domestic product has a positive impact on economic development in Nigeria. In terms of primary balance, the result shows a negative coefficient, indicating an unbalanced budget which has a negative effect on economic development in Nigeria. Based on the results of the study”, the study recommended that for the fiscal policy of Nigeria to be sustainable, the government should try within its limit to increase its revenue while ensuring that the debt and expenditure are within the limit of its revenue to avoid deficit.Downloads
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