An Autoregressive Distributed Lag Analysis of the Effects of Public Expenditure on Economic Growth in Nigeria

Izuchukwu Ogbodo, Izunobi Anthony Okechukwu and Sampson Ikenna Ogoke
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Izuchukwu Ogbodo: Department of Banking and Finance, Enugu State University of Science and Technology, Enugu, Nigeria.
Izunobi Anthony Okechukwu: Department of Banking and Finance, Kingsley Ozumba Mbadiwe University, Ideato, Imo State, Nigeria.
Sampson Ikenna Ogoke: Department of Banking and Finance, Kingsley Ozumba Mbadiwe University, Ideato, Imo State, Nigeria.

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Abstract: This study examines the growth effects of public expenditure in Nigeria over the period 1986–2020, with particular emphasis on spending in health, defence, education, and agriculture. Using annual time-series data sourced from the Central Bank of Nigeria Statistical Bulletin, the analysis adopts an ex post facto research design. The Autoregressive Distributed Lag (ARDL) approach is employed for estimation, alongside descriptive statistics and unit root tests to assess the distributional properties and stationarity of the variables. The empirical findings reveal that public expenditure exerts a positive and statistically significant influence on economic growth in Nigeria. Based on these results, the study recommends increased investment in the health sector, particularly in rural communities, to enhance population welfare and productivity. It also underscores the need for greater transparency and accountability in defence spending to strengthen its growth impact. Furthermore, sustained funding for education is essential to reduce recurrent industrial actions and improve human capital development, while stronger support for anti-corruption agencies is necessary to curb fiscal leakages. The adoption of a medium-term expenditure framework is additionally advocated to promote fiscal discipline and ensure long-term sustainability of public finances.

Date: 2026-01-06
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Published in Journal of Global Economics, Management and Business Research, 2026, 18 (1), pp.66-79

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05450460

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