Public expenditure: Economic growth in  Cross River State Nigeria prospects and effects

Abstract

This study was set out to empirically investigate the prospects and effects of government expenditure on economic growth in Cross River State, Nigeria. Three selected areas of government expenditure which include: government expenditure on education, agriculture and health and growth rate of Cross River State as proxy for economic growth. Time series data covering the period between 2007 and 2015 were used for the study. The analysis examined the stochastic characteristics of each time series by testing their stationality using Augmented Dickey Fuller (ADF) test. Findings revealed that all the time series are stationary at either first or second difference. The Johansen co-integration procedure indicates that the variables are co-integrated. The likelihood ratio revealed two co-integrating equations in both cases. From the error correction model, the following interesting findings were made, government expenditure on education, government expenditure on health and government expenditure on agriculture significantly affects economic growth in Cross River State. The study recommended that the independent corrupt practices and other related crimes commission and the economic and financial crime should be reformed, strengthened and modernized to engender transparency in the conduct of government affairs and the government should implement tax reforms to increase revenue.

Keywords: Government expenditure, economic growth, expenditure on education, expenditure on health and expenditure on agriculture