Government Capital Expenditure and Output Growth in Nigeria

Abstract

The essence of this paper was to examine the dynamic effect of government capital expenditure on Nigeria’s output growth. The paper concentrated on the period 1990 to 2023 and deployed diverse econometric techniques in the data analysis. While the autoregressive distributed lag (ARDL) technique was utilized to determine the short and long run effect of government capital expenditure on output growth, the pairwise Granger causality test was utilized to establish the mature of the causal relationship between government capital expenditure and output growth in Nigeria. The result from the ARDL model estimation shows that both capital expenditure on economic services and on social and community services were output growth-enhancing both in the short run and in the long run, whereas capital expenditure on administration was growth-enhancing only in the long run.