Government Performance and Economic Growth in Nigeria

Abstract

From the conceptual point of view, economic growth is an indicator of a county’s wealth increasing over time. A positive economic growth has a positive impact on the national income of the country. The objective of this research is to examine the impact of government performance on the economic growth in Nigeria. The study covered a period of 39 years; 1980 to 2019. The data analysis was done using descriptive statistics. The technique for data analysis used for the secondary data is Auto Regressive Distributed Lag model (ARDL) with the aid of data treatment Augmented Dickey Fuller test (ADF). The study carried out a unit root test, using ADF. The result of the test showed that Gross Domestic Product Growth Rate (GDP) is stationary at level; while General Government Final Expenditure (GFE), Official Exchange Rate (OEX) and Inflation Rate (INF) are stationary at first difference, meaning that they are integrated of order one. Findings from the research paper show that government spending has a significant effect on inflation, unemployment, exchange rate; spending also has an effect on the economic growth of Nigeria. Recommendation from the author includes the following: Firstly, policy makers should focus on maintaining inflation to a low rate. Secondly, government should improve economic growth through price stability. Thirdly, monetary policy should be used to create a favourable environment for investment. Lastly, policy makers should also keep exchange rate under control since they help to mitigate negative economic growth and they contribute to economic growth since they are tied tightly to international trade and investment.

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