Infrastructural Spending and Economic Growth in Nigeria
CHAPTER ONE
OBJECTIVES OF THE STUDY
The main objective of the study is to examine the effect of infrastructural spending on economic growth in Nigeria between for periods: 1980-2015. More specifically, the study attempts to:
- A) To examine the effect of infrastructural spending on health on economic growth in Nigeria.
- B) To examine the effect of infrastructural spending on education on economic growth in Nigeria.
- C) To examine the effect of infrastructural spending on agriculture on economic growth in Nigeria.
- D) To examine the effect of infrastructural spending on oil on economic growth in Nigeria.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
This chapter presents the review of related literature on infrastructural spending and economic growth in Nigeria. Views and opinions of other authors will be presented as follows.
Theoretical Framework
This study is based on the following lines of theory: economic theory of growth; public expenditure; and the Keynesian theories;
Economic growth theory
The ideology of economic growth has had a long history, since the eighteenth century when Adam Smith published his Wealth of Nations, which centres on the pursuit of growth. Economic growth is an increase in the monetary value of goods and services of a country over a given period, as indicated by G.D.P.
However, since the 1980s, the growth critique was gradually replaced by the view of ‘decoupling’ of economic growth from environmental deterioration. Such a ‘decoupling’ view was emphasized by the World Commission on Environment and Development as a key strategy of sustainable development in their report ‘Our Common Future’ Keeble, R. (1987). In recent years, the possibility of such decoupling has been increasingly questioned by critics, and they instead propose zero-growth or even de-growth. Thus far, the defenders of growth still stand in the dominant position. The scope of the opponents’ arguments has expanded from its initial focus on resource limits and environmental degradation to a broader range of issues. Xue, J. (2010). Arguments for and against economic growth, explains that economic growth is the increase in services produced in a nation over a long time period. It is measured by an increase in G.D.P. adjusted for inflation, and a nation is expected to continually improve its G.D.P. for sustainability.
There are three types of economic growth theory: classical; neo-classical; and the Solo-Swan modern-day theories. This study attempts to investigate the Solo-Swan modern day theory, which focuses on three factors that affect economic growth, including labour, capital and technology, with particular focus on technology regarding infrastructure advancement and economic growth regarding G.D.P. According to Wells (2015 Wells, K. (2015), the Solo-Swan theory argues that it is technological advancement that grows an economy because labour and capital adjust according to the advance recorded in technology. The study argues that when government spending is zero, there is little economic growth because enforcing contracts, protecting life and property and infrastructure development would be complicated. Hence, government spending is necessary as supported by Keynesian theory.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter deals with the methods and procedures used in the study. The strategies adopted in the collection of data are discussed under the following sub-headings, design of the study, population of the study, sample size, sampling techniques, instrumentation, instrument validation, reliability of the instrument, procedure for data collection and method of data analysis.
Research Design
This study adopted survey research design. According to Ekott & Nseyen (2006), a survey research is one in which a group of people or items is studied by collecting and analyzing data from only a few people or items considered to be representative of the entire group. This study is on the impact of electricity generation and supply on economic growth.
CHAPTER FOUR
ESTIMATION AND INTERPRETATION OF RESULT
Result of Unit Root Test
Table 1. The result of the unit root test.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Introduction
This chapter presents the summary, conclusion and recommendations for further studies.
Summary
This study was carried out to investigate the relationship between infrastructural spending and economic growth in Nigeria. Chapter one is the introduction covering background of the study, statement of the problem, objectives of the study, research questions and research hypotheses as well significance of the study etc. Chapter two is the review of related literature covering theoretical framework which includes public expenditure theory, economic growth theory and Keynesian theory and other related issues on the effect of infrastructure spending and economic growth
Chapter three was research methodology included research design, area of the study, population of the study and sample size and sampling techniques, research instrument etc. In chapter four, the data collected were presented, analyzed and interpreted while the summary, conclusion and recommendations were made in chapter five.
Conclusion
Based on the findings of this study, it is concluded that government spending on transportation and communication, education and health has significant effects on economic growth in Nigeria, while spending on agriculture and natural resources infrastructure has an opposite effect on economic growth in Nigeria. Furthermore, various econometrics analyses from this study revealed that, there exist a long-run relationship between infrastructural development and economic growth in Nigeria.
This was confirmed by the positive relationship of the infrastructural development in road and communication with the economic growth in Nigeria during the period of the study. As for other variables considered, it was deduced that, private investment, degree of openness and education produced negative relationship with economic growth in Nigeria during the period under review. The implication of this is that, apart from the need for the government to beef up their commitment on improving infrastructure in the country, it is essential for the manufacturing sector to be appropriately developed to harness the advantages of openness of the economy; improve budgetary allocation to education and monitor the spending to increase human capital development that is capable of utilizing available infrastructure and resources for the attainment of economic growth.
Recommendations
Based on the findings of this study, the researcher make following recommendations:
- Government spending on infrastructure should be guided by sound governance toward a business-like approach to spending in line with N.P.M.
- The interconnectivity between infrastructure and effective operation of investment, private sector should be encouraged with series of incentives to increase their participations in the provision of infrastructures which in turn will lead to economic growth and development in the Nigeria.
REFERENCES
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- Aregbeyeni, O. & Kolawole,P. (2015). Oil revenue, public spending and economic growth relationships in Nigeria. Journal of Sustainable Development, 8(3), 114–123.
- Blinder, A. (2008). “Keynesian economics”. Concise encyclopaedia of economics.http://www.econlib.org/library/Enc/KeynesianEconomics.html
- Chingoiro, S., & Mbulawa, S. (2016). Economic growth and infrastructure expenditure in Kenya: A Granger-Causality approach. International Journal of Social Science Studies, 4(9), 1–9.
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