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ABSTRACT
The aim of this study is to ascertain the impact of government spending on economic growth in Nigeria with a focus on determining the long run and short run relationship between government spending and economic growth. Secondary aim of this study is to ascertain the degree of dependence of economic growth on other independent variables of inflation and labour force. The model employed in this study is the OLS and the Error Correction Mechanism.. The time frame for this study spanned between the year 1981-2020. This study , the study showed that government spending had a beneficial and considerable impact on Nigeria's economic development. This will also succeed if every naira allocated for this index is wisely spent. The Real Gross Domestic Product is negatively and negligibly impacted by capital spending. It demonstrates that the regression model has a negative association with both the coefficient result and the P-Value.
Also, it was noted that raising white elephant project spending will only slow the rate of economic growth. Recurrent expenditure for example spending on education has a favourable and considerable effect on Nigeria's economic expansion. This demonstrates that an increase in education spending will probably lead to a rise in economic growth. This will also succeed if every naira allocated for this index is wisely spent.
However, it was suggested that Government spending, both capital and ongoing, needs to be managed and tracked during execution to improve comparably successful outcomes in relation to economic growth. They should see to it that capital and ongoing expenses are appropriately managed so as to improve the country's foreign relations as it relates to conducting business with other nations. This will have a long-term effect of stabilising the economy and increasing the value of her currency, which will result in economic growth .
