An Overview of Government Expenditure and the Manufacturing Sector Output in Nigeria

Abstract

This paper studied the impact of government expenditure on the manufacturing sector output in Nigerian within a period spanning 1981 to 2021. Ordinary Least Squared (OLS) method of data analysis was used because of its Best Linear Unbiased Estimators (BLUE) properties. The data for the variables used was sourced from Central Bank of Nigeria Statistical Bulletin. The variables used were government recurrent expenditure, government current expenditure and manufacturing sector output. The unit root test, co-integration method, and error correction mechanism were all adopted in course of the study. The analysis was conducted using the E-View software. The study revealed that, the manufacturing sector is significantly impacted by capital expenditures. Similarly, the output of the industry is significantly impacted by recurring expenditure. Emanating from the empirical investigation, the study recommends that adequate budgeting provision should be allocated to Government spending and thus be channelled to capital projects tailored towards better execution of spending guideline.