Government Sectorial Spending and Its Effect on Nigerian Economic Growth

Abstract

Few decades ago many developing economies like Nigeria started to privatize their state owned enterprises. But owning to the fact that these public enterprises are means of income redistribution, those benefiting from this redistribution would use whatever political power they have to oppose this policy. The study investigates the impact of government sartorial spending on economic growth in Nigeria. The study made use of regression analysis (OLS) and cross sectional data for Nigeria between 1970 – 2012. The study reveals that there is a positive relationship between public enterprise and economic growth. The study, therefore, recommends that government should increase her spending on public enterprises that are highly productive.