Oil Revenue And Government Expenditure In Nigeria
Tubotamuno Boma
Department of Economics, University of Port Harcourt, Nigeria
Daso, Amabibi
Department of Economics, University of Port Harcourt, Nigeria
Keywords: Capital expenditure, Recurrent expenditure, Government, Oil, Revenue
Abstract
This study examined oil revenue and government expenditure in Nigeria. Specifically, it investigated the impact of oil revenue on government expenditure in the country over the period 1999 to 2019. The technique of generalized method of moment (GMM) was employed to analyze secondary data collected from Central Bank of Nigeria statistical bulletin. The result of the Augmented Dickey Fuller unit root test showed that both the dependent and the independent variables were stationary at first difference. The empirical findings from the GMM revealed that percentage increase in oil revenue causes total government expenditure to increase. The foregoing finding bears an important implication for policy formulation, given the direct relationship between oil revenue and government expenditure. Thus, government needs to re-examine the shares of both capital and recurrent expenditure in total government spending coming from oil revenue. Therefore, given the huge revenue from oil, government should boost spending on developmental projects.