DISAGGREGATED PUBLIC EXPENDITURE AND ECONOMIC GROWTH IN NIGERIA

doi

Abstract

The study examined the effect of disaggregated public expenditure specifically government expenditure on education and infrastructure on economic growth in Nigeria between 1981 and 2020. Despite successive fiscal reforms, Nigeria continues to grapple with slow economic growth, infrastructural gaps, and underfunded education, raising concerns over the effectiveness of public spending in driving long-term development. The study employed time series data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and the National Bureau of Statistics (NBS). Descriptive statistics, Augmented Dickey-Fuller (ADF) unit root tests, and econometric estimations were used to examine the relationship between education expenditure, infrastructure expenditure, and economic growth (proxied by real GDP). The results revealed that expenditure on education has a positive but statistically weak 
effect on economic growth, reflecting underinvestment, poor fund utilization, and systemic inefficiencies in Nigeria’s education sector. In contrast, infrastructure expenditure was found to exert a significant positive influence on economic growth, underscoring its critical role in enhancing productivity, promoting trade, and attracting investment. These findings suggest that while both components of public expenditure are growth-enhancing, infrastructure spending has a more immediate and robust effect on economic performance than education expenditure. The study concludes that the government should strengthen fiscal policies that prioritize 
infrastructural development while ensuring effective and transparent allocation to the education sector. Recommendations include increased budgetary allocation to education, coupled with reforms to curb leakages, and sustained infrastructural investment to stimulate inclusive and sustainable economic growth.