Government Expenditure on Critical Infrastructure and Economic Growth in Nigeria: Implication to Education and Health Sectors

Abstract

This study examines Government expenditure on critical infrastructure and economic growth in Nigeria: Implication to Education and Health Sectors from 1999-2022 using Ordinary least Square (OLS) technique method. All data used are secondary data obtained from the Statistical Bulletin of Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) annual publications after conducting various preliminary test like the Augmented Dickey-Fuller (ADF) tests, autocorrelation, multicollinearity and heteroscedasticity test. From the result of the OLS, it is observed that human capital development, government expenditure on education and health, and life expectancy have positive impacts while corruption have a negative impact on economic growth in Nigeria. This means that if human capital development, government expenditure on education and health, and life expectancy increase and improve, they will lead to higher economic growth in Nigeria, while increase in corruption will bring about a decline in economic growth in Nigeria. On the other hand, human capital development, government expenditure on education and health, and life expectancy has positive impacts while corruption has a negative impact on economic growth in Nigeria. The F-test conducted in the study shows that the model has a goodness of fit and is statistically different from zero. In other words, there is a significant impact between the dependent and independent variables in the model. Finally, both R2 and adjusted R2 show that the explanatory power of the variables is high and strong in explaining the economic growth in Nigeria. Based on the findings of the study, the study recommends that the government should improve the human development index by enhancing labour productivity and reducing the overall level of corruption perception. The government expenditure on education should be improved to compete with the international benchmark of 25% of annual national budget.  The government should adequately improve on health infrastructure and manpower development to enhance the nation’s life expectancy index. Proper legislation should be put in place to help reduce the nation’s corruption perception index.