Abstract

There have been public debates on the relevance of fiscal policy in correcting market failure and ensuring economic growth. In Nigeria, there have been public outcry over the continue rise in government expenditure in the last three decades. Though the rise has not translated into economic prosperity for the citizens as the country has been reported to have the highest number of poor people in the world. This further generated argument as to whether the rise in the government expenditure is channeled to productive sectors of the economy. It is on this note that the study examined the impact of government sectoral expenditure on economic growth from 1981-2017. The specific objective of the study is to find out the impact of government agricultural, health and educational expenditure on economic growth in Nigeria. To achieve the broad objective, the study sourced data from the CBN statistical bulletin for annual period of 36 years (1981-2017) being a time series analysis. The study adopted Ordinary Least Square (OLS) estimation technique for the analysis. The unit root test was done using Augmented Dickey Fuller (ADF) test and Johansen test was used to test the long run relationship amongst the variables in the model which were facilitated using Eviews 10 software. The result from the findings revealed that government health expenditure (GHE) has positive and significant effect on economic growth (RGDP) while government agricultural expenditure (GAE) and government education expenditure (GEE) both have inverse and insignificant effect on economic growth for the period under study. The study recommended among other things that government should begin to prioritize agricultural funding up to the Maputo declaration of 10% budgetary commitment to agriculture. This is necessary because of the viability of the sector to create employment opportunity and ensure food security in the country.