IMPACT OF PUBLIC EXPENDITURE AND HUMAN CAPITAL DEVELOPMENT ON ECONOMIC GROWTH IN NIGERIA

This paper examines the impact of public expenditure and human capital development on Nigeria’s economic growth. It utilizes Autoregressive Distributed Lag (ARDL) Model of cointegration. Data for the analysis are extracted from annual series of the selected relevant macroeconomic variables from 1985 to 2019. The findings reveal that federal government expenditure on economic services has positive and significant effect on GDP; expenditure on general administration has no effect on GDP; rate of inflation has a negative but insignificant effect on GDP; education tax and investment in human capital development have positive and significant effect on the growth of the Nigerian economy over the sampled period. In order to boost GDP and overall performance of the economy, the study recommends for the need for the federal government to tilt the level of annual budgetary allocation in favor of economic services; productive government expenditure in conjunction with private sector investment plans should always outweigh expenditure on consumption and luxury items; and effective control of the rate of inflation should be part and parcel of federal government’s medium and long term expenditure frameworks; provide a suitable environment for ensuring macro-economic stability through effective utilization of income from education tax that will encourage increased investment in human capital in the public sector.