Effect of Government Expenditure on Standard of Living and Economic Growth in Nigeria

Osuagwu Felicia Obiageri, Ugwuanyi Charles Uche and Justin C. Alugbuo

^1,2,3Department of Economics, College of Management Sciences (COLMAS), Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria.

Corresponding Author’s Email: jc.alugbuo@mouau.edu.ng

ABSTRACT

This study investigated the effects of government expenditure on the standard of living and economic growth in Nigeria over the period 1981-2023, employing the Autoregressive Distributed Lag (ARDL) estimation technique. Time series data was sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin (2023) and the World Development Indicators. The analysis, conducted using E-Views 12 software, revealed that government expenditure on education had a negative relationship with both the standard of living and economic growth, both in the short and long periods. In contrast, government expenditure on health demonstrated a positive and significant relationship with the standard of living in both time periods, while it showed a negative and significant relationship with economic growth. Expenditure on agriculture negatively impacted both the standard of living and economic growth. Similarly, government spending on transport and communication exhibited a negative and significant relationship with both economic growth and the standard of living. However, government expenditure on roads and construction was found to have a strong positive and significant relationship with both the standard of living and economic growth. Based on these findings, the study recommended that the government should closely monitor the execution of expenditure on education to ensure proper allocation and utilization of funds. Furthermore, it suggested that increased investment in road infrastructure would foster private sector productivity, improve the distribution of goods, enhance the standard of living, and contribute to economic growth.

Keywords: Government Expenditure; Standard of Living; Economic Growth; ARDL Estimation Technique; Nigeria.

CITE AS: Osuagwu Felicia Obiageri, Ugwuanyi Charles Uche and Justin C. Alugbuo (2025). Effect of Government Expenditure on Standard of Living and Economic Growth in Nigeria. NEWPORT INTERNATIONAL JOURNAL OF CURRENT RESEARCH IN HUMANITIES AND SOCIAL SCIENCES,5(3):64-73 https://doi.org/10.59298/NIJCRHSS/2025/5.3.647300