GOVERNMENT EXPENDITURES AND ECONOMIC GROWTH IN NIGERIA
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
GOVERNMENT EXPENDITURES AND ECONOMIC GROWTH IN NIGERIA
Chapter one
Introduction
Background of the study.
Government expenditures are the amounts of money that the government spends on various goods and services. These expenditures have the potential to significantly alter a country’s economic growth. Nigeria, like many other developing countries, has been seeking for long-term economic growth, and government spending is crucial to this goal.
Over the years, the Nigerian government has spent a lot of money on infrastructure development, education, healthcare, defence, and social welfare programmes. The fundamental goal of these expenditures is to raise people’s living conditions and promote economic growth (Akanbi, 2014).
Nigeria’s government expenditures and economic growth are positively related. Increased government spending on infrastructure projects such as roads, bridges, airports, and seaports can improve transportation and communication networks, hence stimulating economic activity and attracting international investment. (Smyth and Hsing, 2009).
Government expenditures on education and healthcare can boost the country’s human capital, resulting in increased productivity and economic growth. A healthy, educated populace is critical for long-term economic development. (anyamu, 2013).
Defence spending can also have a positive impact on economic growth by improving national security and stability, which are necessary for attracting foreign investment and stimulating economic activity. (Ajayi and Oke, 2012).
However, excessive government spending can cause inflation, a fiscal deficit, and debt accumulation, all of which have a negative impact on the economy. To minimise macroeconomic imbalances, the Nigerian government must maintain a balance between government expenditure and revenue generation.
Economic growth is the expansion of a country’s GDP or products. Growth indicates a rise in economic activity.
Economic experts have expressed a strong interest in the relationship between public spending and economic growth, both theoretically and empirically. In general, two opposed viewpoints can be distinguished as follows: On the one hand, there is the Keynesian approach
which holds that government spending is an important policy tool for maintaining a reasonable level of economic activity, correcting short-term cyclical fluctuations in aggregate expenditure (Singh and Sahni, 1984), and ensuring an increase in productive investment, thus providing a socially optimal path for growth and development (Ram, 1986).
The opposing viewpoint is that excessive state intervention in economic life has a negative impact on growth performance for two reasons: first, because government operations are frequently conducted less efficiently
They reduce the overall productivity of the economic system, and second, because excessive government expenditure (usually accompanied by high taxation levels) distorts economic incentives and results in suboptimal economic decisions (Barro 1990; King and Rebelo 1990).
Statement of the Problem
Nigeria is a resource-rich country with huge economic potential. However, the country has faced a number of economic issues, including slow economic development, significant unemployment, and a wide income disparity gap.
Government spending has the ability to assist address these difficulties by creating jobs, building infrastructure, and promoting business development.
Despite the potential benefits of government spending, there is concern that inefficient use of funds or corruption may undermine its positive impact on economic growth.
Furthermore, Nigeria’s economy is primarily reliant on oil exports, making it sensitive to variations in global oil prices, emphasising the importance of long-term economic growth outside of oil.
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL