Public Expenditure and Economic Growth in Nigeria

ABSTRACT Government expenditure has remained a significant and unavoidable instrument for fiscal policy. While government expenditure has been instrumental in driving most economies yet the impact and sectoral outcomes vary across countries. This study therefore investigates the impact of public health and education expenditure on their sectoral outcomes. Under-5 mortality rate and total school enrolment were used as health and education outcomes respectively. The study used vector error correction mechanism (VECM) to investigate the impact of government expenditure on total school enrolment and under-5 mortality rate in Nigeria in the period 1980- 2010. The results suggest that government health expenditure significantly reduces under-5 mortality rate while government expenditure on education did not significantly affects total school enrolment. Furthermore, female education was found to have a negative relationship with under-5 mortality (health outcome) though its effect was not significant. The study also shows that additional increase in percapita GDP will increase total school enrolment significantly. Based on the result that health expenditure significantly reduces under-5 mortality rate, it is recommended that health expenditure be encouraged to improve health care generally and also emphasis should be laid on the need for the education of girl child who will later become mothers. Similarly education expenditure should be monitored to ensure that funds get to their destination and be better managed so as to impact significantly on education outcomes.