Abstract:
A b s t r a c t
The major goal for government expenditure policies according to Keynes
is to improve the effective demand which is aimed at increasing
industrial output in developing countries like Nigeria. Therefore, this
paper is an attempt to examine the impact of government expenditures on
industrial output in Nigeria. Thus, the methodology of this paper is the time
series data method which were sourced from the Central Bank of Nigeria
statistical bulletin 2021 and the study also employed the Fully Modified
Ordinary Least Squares (FMOLS) because the data were co-integrated at order
1(1) and the Johansen co-integration test result revealed that there are two (2) cointegrating
equations. The R-Square of 98 percent suggests that government
expenditures have a positive relationship with industrial output in Nigeria.
Specifically, the result revealed that government capital expenditures have a
positive and insignificant impact on industrial output in Nigeria. However, the
government's recurrent expenditure was said to have a positive and significant
impact on industrial output in Nigeria. Therefore, the study recommended that
government should review the recurrent expenditures to be real sector and
industrial output is driven to increase the impact of industrial output in Nigeria.
Similarly, the government should design a mechanism to track the government
capital expenditures in Nigeria to ensure that projects are industrial driven
especially the infrastructural projects for industrial output in Nigeria
