GOVERNMENT EXPENDITURE AND CONSUMPTION IN NIGERIA (1990-2022): AN ARDL APPROACH
Journal Title: WUKARI INTERNATIONAL STUDIES JOURNAL - Year 2024, Vol 8, Issue 5
Abstract
This study intends to examines the dynamic relationship between government expenditure and consumption in Nigeria over the period from 1990 to 2022. This is due to the fact that Nigeria, as one of the largest economies in Africa, has experienced significant fluctuations in government expenditure and consumption patterns over the years. The aim of this research however is to provide a comprehensive analysis of the role played by government expenditure in influencing household and private sector consumption behavior. On this note the study employs a combination of quantitative methods, including time series data analysis and econometric modeling via an Autoregressive Distributed Lag Model(ARDL) approach to investigate the impact of government expenditure on consumption in Nigeria. The ARDL analysis test approach revealed that the null hypothesis of no significant impact of government expenditures on consumption in Nigeria is rejected at 5% level of significance. Rather, the result of the test hypothesis however showed that government expenditures have positive significant impact on consumption expenditures in Nigeria during the period under review (t-test > 2). Also, the result from the ARDL approach revealed that government expenditure has significant negative impact on consumption spending. GNI and CPI were positives and significant, while INFR and INTR were positive yet insignificant. The results of this study suggest that government consumption spending is a substitute for private consumption and concluded that Government expenditure is inarguably a prominent fiscal tool for a sustainable economic growth.
Authors and Affiliations
EMMANUEL O. AWE, NWIE ABWO SIMON, MOHAMMED NASIRU, UMAR JOHNSON AKOGWU
Keywords
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