CAPITAL EXPENDITURE, INDUSTRIALIZATION AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

This study examined empirically the impact of capital expenditure and industrialization on economic growth in Nigeria using data spanning between the periods 1981 to 2019. Augmented Dickey Fuller test, Co integration test and Error Correction technique were employed. From the study, the findings revealed that industrial output have a positive relationship with economic growth in the country while government capital expenditure has a negative impact on economic growth. Similarly, the findings also revealed that government capital expenditure has no significant impact on growth while industrial output was found to be significant. In conclusion, it is obvious from the result that government capital expenditure on has a negative, though insignificant effects on economic growth in Nigeria. This may be as a result of persistence of misappropriation of priority in term of capital project financing in the country. Hence, the need for the government to strive towards increasing the percentage of capital expenditure and properly manage it in a manner that will raise the quantum of national economic assets, hence improving productive capacity and accelerate economic growth. Finally, there is a need for reviving the key industries in the nation that have been abandon for a long time and also a proper allocation and management of existing industries so as to ensure proper and positive linkage effects on the economy.