Impact of Government Capital Expenditure on Economic Growth in Nigeria: 1980-2020

Abstract

Despite the ever growing capital budgetary expenditure, the Nigerian economic growth has been slow and below expectation. It is against this back drop that the study investigated the impact of capital expenditure on economic growth in Nigeria using time series data. A unit root test was conducted on the data because of the time series nature of it The model used in this study is Auto
Regressive Distributed Lag (ARDL).The results appeared mixed. This is because while the lag value of Capital expenditure on defense (CED) appeared positive and statistically significant, Capital Expenditure on health (CEH), but the coefficient of Capital Expenditure on education (CEE) and Capital Expenditure on transport and communication (CETC) appeared positive. The
implication of this finding is that achieving quality education depends on government investment to the sector. Since economic growth is closely linked with human capital development, academic underperformance can slow growth. With the impact of Corona virus (Covid-19) on socioeconomic status of households in Nigeria. Covid-19 has severe impact on health, education,
employment and income of Nigerian citizen. The study recommends that governments should increase funds to national centre for disease control to enable it perform better, for prevention of disease. The paper therefore, recommended Government should ensure that capital Expenditure are properly managed in a manner that it will raise the nation’s productive capacity and by
extension accelerate economic growth.