International Journal of Research and Review

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Original Research Article

Year: 2016 | Month: October | Volume: 3 | Issue: 10 | Pages: 1-9

Linkage between Economic Growth and Public Expenditure in Developing Country: Evidence from Nigeria

Alayemi Sunday Adebayo1, Ifeoluwa Alao-Owunna2

1Chief Lecturer, Department of Accountancy, School of Business and Management Studies, the Federal Polytechnic, Offa, Nigeria.
2Assistant Lecturer, Department of Economics, Faculty of Business and Social Sciences, Adeleke University, Ede, Nigeria.

Corresponding Author: Alayemi Sunday Adebayo


This study examined linkage between economic growth and public expenditure in developing country, using Nigeria as a case study. Ordinary Least Square (OLS) regression method and the Co-integration test to were used to test the propositions of the subject matter. The results indicated that both government recurrent and capital expenditure have significant positive effect on Nigeria’s economy in the period of study and they are both important factors of economic growth in Nigeria. It was further observed that government’s recurrent expenditure exceeded the capital expenditure. Based on the findings of the empirical analysis, the study recommended that capital expenditure should exceed recurrent expenditure and higher budgetary allocations which has always been made should be put into utilisation, closely monitored and accountable for by those in charge so as to bring to a minimal the siphoning and embesslement of public funds in order to steer the country to sustainable growth.

Key words: Ordinary Least Square, Co-integration, recurrent expenditure, capital expenditure, budgetary allocation.

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