1Lubo Ebisine,2Bigbo Oki
1,2Department of Economics, University of Africa, Toru-Orua, Bayelsa State, Nigeria
DOI : https://doi.org/10.47191/ijmra/v4-i7-10Google Scholar Download Pdf
ABSTRACT:
This paper empirically examined the effect of public expenditure on inflation in Nigeria in Nigeria from 1981 to 2018. The study adopts descriptive statistics, Co-integration and Error Correction Mechanism techniques for the analysis. The data for the empirical analysis were sourced from secondary sources like CBN Statistical Bulletin. The results of analysis indicated that a long run relationship exists among the variables. Furthermore, the paper revealed that government expenditure on transport and communication (XTCM) has a positive but insignificant relationship with inflation (CPI) at 5 percent level; government expenditure on defense (XDFS) is positive and an insignificant effect on inflation (CPI) in Nigeria; government expenditure on agriculture (XAGR) is negative and an insignificant effect on inflation (CPI) in Nigeria; government expenditure on education (XEDU) is positive and an insignificant effect on inflation (CPI) in Nigeria and government expenditure on health (XHLT) is negative and an insignificant effect on inflation (CPI) in Nigeria. Based on the above findings, the paper recommends as follows: Government should be effective in channeling public funds to productive economic activities, which will enhance price stability in Nigeria. Also, government consumption spending should be well coordinated by all arms of government to prevent “Crowd out” effect on government investment.
KEY WORDS:Public Expenditure, Transport and Communication, Defense, Agriculture, Education, Health and Inflation (CPI).
REFERENCES
1) Adeyeye, E. A & Fakiyisi, T.O (1980). Productivity Prices and Income board and anti-inflationary policy in Nigeria. The
Nigeria economy under the military, Nigerian Economic Society. Ibadan: Processing of the 1980 annual Conference.
2) Aizenman, J. and Hausman R. (2000). “The impact of inflation on budgetary discipline” Journal of Development Economics
63, 425 – 449.
3) Akinnifesi, E.O (1977, 184). In Cynthia, C.D (2018). Public spending and inflation in Nigeria. International Journal of
Advance Academic Research Social and Management Science Vol. 4.
4) Anyanwu, JC (1997). Nigeria Public Finance: Onitsha: Joanee. Educational Publishers Ltd.
5) Asogu, J.O. (1991). An Econometric Analysis of the Nature and causes of inflation in Nigeria. Central Bank of Nigeria
Economic and Financial Review, Lagos.
6) Bhartia, H.L. (2006). Public Finance, New Delhi: Vikas publishing House PVT Ltd.
7) Central Bank of Nigeria (2011). Statistical Bulletin, Abuja.
8) Central Bank of Nigeria (2017). Statistical Bulletin. Lagos: Central Bank of Nigeria.
9) Cynthia, C.D (2018). Public spending and inflation in Nigeria. International Journal of Advance Academic Research Social
and Management Science Vol. 4.
10) Egbulonu, K.G., and Wubilor, A.K. (2016), Impact of fiscal policy on inflation in Nigeria, Economy. International Journal of
Innovative Development and Policy Studies 4(3), 53 – 60.
11) kEverton, Vincent and Wilvon (2012). Public Spending and Inflation in Nigeria. International Journal of Advance Academic
Research Social and Management Science Vol. 4.
12) Ezirim, C.B. Moughalu, M.I and Elike, U (2008). “Inflation versus public Expenditure Growth in the US: and Empirical
Investigation,” North American Journal of finance and Banking Research, 22.
13) Ezirim, C.B. Moughalu, M.I and Elike, U (2010). “Public Expenditure Growth, Inflation and Co-integration: Evidence from
Nigeria,” International Journal of Business and Behavioral Sciences Research, (1): 1-16.
14) Jhingan. M.I (2004b). Money, Banking, International Trade and Public Finance (7th ed New Delhi: Vrinda Publication (p)
Ltd.
15) Kia, A., (2006). Deficits debt financing, monetary policy and inflation in developing countries: Internal and external
factors? Evidence from Iran”. A journal of Asian Economics 17,879-903.
16) Maku, O.E. (2009). Does government spending spur Economic growth in Nigeria? Munich Personal Rc PEc Archive.
17) Medee, P.N. and Nenbee, 5.G (2012). The impact of fiscal deficits on inflation in Nigeria. International journal economic
development Research and investment, 3(1), 12 – 21.
18) Mehraraa, M., Soufianib, M. B and Rezaei, S (2016). The impact of Government spending on inflation through the
inflationary environment, STR approach. World Scientific News (WSN), 37, 153 – 167.
19) Musgrove, R.A. and Musgrove, P.B (2004). Public Finance in Theory and Practice. New Delhi: Tata McGraw Hill.
20) Nyambe, J.M and Kanyeumbo, J.N. (2015). Government and household expenditure components, inflation and their
impact on economic growth in Namibia. Journal of Business, Economics and Accountancy, 6(15), 36-41.
21) Ogbole, O.F., and Nenbee, S.G (2012). The impact of fiscal deficits on inflation in Nigeria International journal of economic
development Research and investment, 3(1), 12 – 21.
22) Ogbonna, B.C. (2014). Inflation dynamics and government size in Nigeria. International journal of Economics, commerce
and management United Kingdom, 11(12), 1 – 22.
23) Ojarike, O.J, Ezie, O and Torka, T.M (2015), Public expenditure growth and inflation in Nigeria: The causality approach.
International journal of Economics and management studies, 2(1), 26 – 35.
24) Olaiya, S.A, Nwosa, P.I and Amassoma D. (2012); a Trivariate causality Test among Economic Growth, Government
Expenditure and Inflation Rate: Evidence from Nigeria, Research Journal of Finance and Accounting, 3, (1).
25) Olayunbo, D.O. (2013). Government spending and inflation in Nigeria: An Asymmetry causality Test. International journal
of Humanities and management Sciences (IJHMS), 1(4), 238- 242.
26) Osakwe, J.O. (1983). Government Expenditure, Money supply and Prices, 1970 – 1980” CBN Economic and Financial
Review, 21(2).
27) Ozurumba, B.A. (2012). Fiscal Deficit and Inflation in Nigeria: causality Approach, International journal of Scientific and
Technology Research, 1(8): 1-12.
28) Peter, G.A. (2015). Effects of public expenditure on selected macroeconomic variables in Nigeria: 1986 – 2012. An
unpublished thesis submitted to Department of Economic, faculty of social sciences Ahamadu Bello University Zaria.
29) Udu, E (1989), “New system Economics” African Publishers Ltd, Onitsha.
VOLUME 04 ISSUE 07 JULY 2021
Our Services and Policies
Authors should prepare their manuscripts according to the instructions given in the authors' guidelines. Manuscripts which do not conform to the format and style of the Journal may be returned to the authors for revision or rejected.
The Journal reserves the right to make any further formal changes and language corrections necessary in a manuscript accepted for publication so that it conforms to the formatting requirements of the Journal.
International Journal of Multidisciplinary Research and Analysis will publish 12 monthly online issues per year,IJMRA publishes articles as soon as the final copy-edited version is approved. IJMRA publishes articles and review papers of all subjects area.
Open access is a mechanism by which research outputs are distributed online, Hybrid open access journals, contain a mixture of open access articles and closed access articles.
International Journal of Multidisciplinary Research and Analysis initiate a call for research paper for Volume 07 Issue 04 ( April 2024).
PUBLICATION DATES:
1) Last Date of Submission : 25 April 2024 .
2) Article published within a week.
3) Submit Article : editor@ijmra.in or Online
Why with us
1 : IJMRA only accepts original and high quality research and technical papers.
2 : Paper will publish immediately in current issue after registration.
3 : Authors can download their full papers at any time with digital certificate.
The Editors reserve the right to reject papers without sending them out for review.
Authors should prepare their manuscripts according to the instructions given in the authors' guidelines. Manuscripts which do not conform to the format and style of the Journal may be returned to the authors for revision or rejected. The Journal reserves the right to make any further formal changes and language corrections necessary in a manuscript accepted for publication so that it conforms to the formatting requirements of the Journal.