Determinants of non debt government expenditure in Nigeria: 1970-2003.

Abstract

This paper is an empirical attempt to situate and examine the trend in the growth and structure of non-debt government expenditure in Nigeria. The objective is to elicit the determining factors driving non-debt expenditure growth profile, and by implication the growth of gross domestic product (GDP) in Nigeria. The study found a continuous downward movement, compared with allusions of increasing size of government expenditure as measured by the expenditure to GDP ratio. Econometric analysis indicated the existence of positive relationships and high sensitivity of total non debt expenditure to population growth, gross domestic product, total revenue and political activities, but an inverse relationship with inflation rate. The paper recommended the diversification of the revenue base of the economy, injection of capital investment, strengthening the tax mechanism as well as the deliberate formulation and implementation of policies that would engender expenditure on social and community services with a view to improving the living standards of the people and fostering growth and development in the process.