Abstract

The research work investigates the role of capital expenditure in promoting the growth of the Nigeria economy. The work used disaggregated government spending on education, social and community services, and transfers as explanatory variables. The research work explored annual data on the variable from the CBN statistical bulletin for the period of 1991 to 2022. The stationarity of the series were confirmed using the Augumented Dickey Fuller (ADF) technique. The outcome of the unit root test revealed that except expenditure on transfer, all other variables were not stationary at their levels but all the variables were stationary at first difference.Therefore, the research work explored the autoregressive distributed lag (ARDL) technique to estimate the model. The outcome of the Bound test revealed that there is the evidence of long run relationship among the variables. The signs on the coefficients that government expenditure on capital projects in education and services, social and community services have positive impact on economic growth in Nigeria. The study also found that expenditure on transfers has negative impact on economic growth both in the short run and long run. On this note, the study recommended an increase in government expenditure on capital projects particularly on infrastructures that promote productivity in the economy.