European Journal of Accounting, Finance and Investment

Effect Of Current Budget Implementation On Economic Growth Of Nigeria

Egwu, Pauline Ogeri

Department Of Accounting and Finance, Faculty Of Management And Social Sciences, Godfrey Okoye University, Ugwuomu-Nike, Enugu

Prof. A. S. Eyisi

Department Of Accounting and Finance, Faculty Of Management And Social Sciences, Godfrey Okoye University, Ugwuomu-Nike, Enugu

Keywords: Current Budget, Government Expenditure, Capital Expenditure, External Debt, Economic Growth

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Abstract

The aim of this study was to investigate the effect of current budget implementation on economic growth of Nigeria. In order to achieve the aim of this research, three specific objectives were stated being to; examine the effect of government recurrent expenditure on the gross domestic product in Nigeria; ascertain how government capital expenditure affects on the gross domestic product in Nigeria and examine the effect of external debt on the gross domestic product in Nigeria. Ex – post facto research design was adopted. The study used secondary sources of data from Central Bank of Nigeria Statistical Bulletin while the analytical techniques used for the study was Autoregressive Distributed Lag Model (ARDL) while descriptive statistics and unit root test were used as the preliminary tests. It was revealed out that government recurrent expenditure has significant effect on gross domestic product in Nigeria; government capital expenditure does not significantly affect gross domestic product in Nigeria and external debt significantly affect gross domestic product in Nigeria. The study recommended that the federal government should further increase its recurrent expenditure as this will be an immense boost to the growth of the Nigerian economy as the study discovered that government recurrent expenditure has significant effect on gross domestic product in Nigeria. The federal government need to revert to development planning utilizing programme based budget that address development interventions in an objective and result oriented framework, hence making capital expenditure spent more positively impactful on national development needs as it was found out that government capital expenditure does not significantly affect gross domestic product in Nigeria. The government should ensure economic and political stability in order to enjoy the benefits of external debt and make the debt burden minimal and as well as acquire external debt largely for economic reasons rather than social or political reasons. This would increase the productivity of the nation.