The Impact Of Public Capital Expenditure On Selected Economic Performance Indices In Nigeria (1981-2015)

ABSTRACT

The study investigates the impact of public capital expenditure on Selected Economic Performance Indices the period 1981-2015. The data for the study were sourced from various issues of the Central Bank of Nigeria’s statistical bulletin. The data was subjected to unit root test using Augmented Dickey fuller (ADF) approach to ascertain the time series properties. Descriptive statistics was used to assess the socioeconomic characteristics of the variables. Due to the mixed order of integration witnessed in the unit root, ARDL- Autoregressive Distributed Lag approach was used for cointegration and regression analysis. The results found that Public capital expenditure has negative and statistically significant (t_{cal =} -2.6996) impact on the Nigerian economy proxied by GDP growth rate. Also, Public capital expenditure is negatively signed and statistically significant (t_{cal =} -2.903) in influencing Inflation Rate (INFR), while Public capital expenditure has no (t_{cal =} 1.36925) statistically significant influence on the Poverty Rate (POVR). The findings implies that capital expenditures in Nigeria has the potential to accelerate economic performance when given the adequate attention it deserves. Sequel to the findings, this study recommends that Government should ensure that capital expenditure are properly managed in a manner that will raise the nation’s productive capacity and accelerate economic growth. Furthermore, Nigerian Government should increase its investment in production sectors and encourage skillful and willing citizens to participate since this would reduce the expenses being incurred on business as a result of low currency value and raise the profitability of firms. Also, there should be more capital expenditure on the following sectors - education, electricity, economic services, health sectors through increased funding, as well as ensuring that the resources are properly managed.