Impact of Infrastructure Investment on Economic Growth in Nigeria: An Autoregressive Distributed Lag Approach

Irene Olanma Onwuemeka, Uche Collins Nwogwugwu and Emmanuel Onwuka
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Irene Olanma Onwuemeka: Department of Economics, Renaissance University Agbani, Enugu State, Nigeria
Uche Collins Nwogwugwu: Department of Economics, Renaissance University Agbani, Enugu State, Nigeria
Emmanuel Onwuka: Department of Economics, Renaissance University Agbani, Enugu State, Nigeria

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 1, 288-298

Abstract: This study examined the relationship between government spending on economic infrastructure and economic growth in Nigeria from 1989 to 2018. Real gross domestic product was used to proxy economic growth and was specified as a function of government spending on transport and communication, government spending on power and employment rate (as a proxy for the classical theory of labour force).The Autoregressive Distributed Lag Bounds method to co-integration was chosen to ascertain the impact and the long-run relationship between the dependent and independent variables. The short-run and long-run results showed that government spending on power exerted a positive but insignificant effect on Nigeria’s RGDP. However, government spending on transport and communication had a positive relationship in the short-run but negative relationship in the long-run. Furthermore, the Causality results showed a uni-directional causality running from RGDP to GEXP and EMP to GEXTC but there was no evidence to support the existence of causality between the remaining pairs of variable. It is recommended that in order for Nigeria to achieve infrastructure development success, it is important that the government redirect excessive revenue in the maintenance of government official to these pivotal sectors of the economy with a view to monitoring the implementation after disbursing funds to the affected ones to subsequently trigger economic growth.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:6:y:2022:i:1:p:288-298

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