Government Expenditure on Education and Health in Nigeria: Implications for Economic Growth using Evidence from ARDL Analysis
Prosper C. Ohanyere, and Omezue A. Nnali
Abstract
This study examines the effects of government expenditures on education, health and economic growth in Nigeria using time series data from 1981 to 2024. Specifically, the study evaluates the effects of government investment on education and health, school enrolment and gross fixed capital formation on the growth of the Nigerian economy. Preliminary data analysis showed that the variables were integrated of order I(0) and I(1), validating the adoption of the ARDL technique. The major findings of the analysis indicated that a robust long-run relationship exists between economic growth and government expenditures. The results further revealed that government investment in human capital through education and health showed a significant (p < 0.05) positive long-run impact on economic growth. School enrolment showed a significant (p < 0.05) and positive effect on economic growth in both the short and long run, while gross fixed capital formation positively influenced long-run economic growth. Relying on the findings, this analysis advised that the government should continue to boost its allocation to the education and health sectors; the government should also implement measures that directly target outcomes, such as increasing school enrolment through initiatives like free education and school feeding programs, and enhance public-private partnerships to boost capital formation.