ABSTRACT

The study investigates the impact of government expenditure on economic growth of Nigeria from the period 1980-2011. The objective was set to address the problem of utilization of revenue targeted to improving the economic condition of Nigeria. The review of theoretical and empirical literature provided a basis for the selection and specification of model which was used to show if government capital and recurrent expenditure has positive or negative impact on economic growth. The data were got from CBN statistical bulletin. To proper solution to the problem, policies were recommended to tackle the setbacks to economic growth.

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgement

Abstract

Table of content

CHAPTER ONE- INTRODUCTION

1.1      Background of study

1.2      Statement of problem

1.3      Objective of the study

1.4      Statement of hypothesis

1.5      Significant of study

1.6      Scope and limitation of study

CHAPTER TWO

LITERATURE REVIEW

2.1      Theoretical Literature

2.1.1 The Role of Public Expenditure

2.2      Empirical Literature

CHAPTER THREE

3.0      Research Design and Methodology

3.1      Model Specification

3.1.1 Regression Model

3.2      Method of Estimation

3.3      Method of Evaluation

3.4      Economic Apriori Expectation

3.5      Source of Data

CHAPTER FOUR

4.0       Presentation and Analysis of Result

4.1      Interpretation of Result

4.2      Evaluation of Result

4.2.1Economic Apriori Criteria

4.2.2Statistical Criteria {first order test}

4.2.2.1            Coefficient of Multiple Determinants {R2}

4.2.2.2          The  student’s-Test  t

4.2.3 F-Statistics

4.3       Economic Criteria 4.3.1 Test for Autocorrelation

4.4      Policy Implication

CHAPTER FIVE

SUMMARY, RECOMMENDATION, CONCLUSION

5.1      Summary

5.2      Recommendation

5.3      Conclusion Bibliography

CHAPTER ONE

1.1      BACKGROUND OF THE STUDY

In all most all economics today government intervention in undertaking fundamental roles of allocation, stabilization, distribution and regulation, especially where or when market proves inefficient or its outcome is socially unacceptable. Government also intervenes, particularly in developing economics to achieve macroeconomics objective such as economic growth and development, full employment, price stability and poverty reduction.(AESS PUBLICATION 2011).

Public finance is to provide information to all arms of government in other to provide use full data as done for the develop nations that transferred public finance technology to developing nation. Public finance is used for allocation, stabilization and distribution (Musgrave and Musgrave 1989).

Public finance is the study of the principle underlying the spending and raising of funds by public authorities (shirras, 1969). It is the field of economics that studies government activities and alternative means of financing expenditure (hymann 1993))

It is a fact that no society though out history has ever attained a high level of economic affluence without a government. Where government do not exist anarchy reigned and little wealth was accumulated by productive economy activity. After government took hold the rule of law and the establishment of private property right often contributed and it has similarly impacted on their societies as well.

Economic growth represents the expansion of a country GDP or outputs. Growth means an increase in economic activities.

Todaro (1995) Citing Kuznets defined a country economic growth as a long term rise in capacity to supply increasing diverse economic goods to is population, this growth capacity based on advancing technology and the institutional and ideological adjustment that is demand. The board objective of this project is the role of government expenditure in economic growth.

Government is necessary through by no means sufficient condition for prosperity it is also a facts, however, that where government have monopolized the allocation of resources and other economic decisions, societies have been successful in attaining

relatively high level of economic affluence. Economic progress is limited both when it is at or near 100%. The experience of the old Soviet Union is revealing as well the comparison of east and West Germany during the cold war era or of north and South Korea today.

In the Nigeria context, the public sectors consist of the federal government, state government and local government. The second national development, just as it considered public enterprise as crucial to growth and self reliance due to capital scarcity, structural defects in the private sector. Third nation’sdevelopment plan(1975-1980) advocated some shift in resources allocation in favors of rural areas which were said to have benefited little from the economic growth of the 1970’s.

Thus smaller farmer and the rural population were expected to benefit from public expenditure.

During the first nation rolling plan (1989-1991), government aimed at effort to combat inflation, hence large budgetary deficits were to be made more avoided. Government expenditures were to be made more cost effective and kept at level that were consistent with

the nations resources realistic growth target and general economic stability

The major instruments by which the government can ensure an effective growth in economic activities are;