This research was carried out in other to find out the impact of public spending on Poverty in Nigeria. Annual data on Government Capital Expenditure, Government Recurrent Expenditure, Gross Fixed Capital Formation and Poverty were collected from the National Bureau of Statistics, Nigeria and the Central Bank of Nigeria covering the period of 1981-2015. The results indicated that Government Recurrent Expenditure did not significantly impact poverty in Nigeria whileGovernment Capital Expenditure and Gross Fixed Capital Formation the proxy for private sector investment significantly impacted on Poverty in Nigeria during the period under review. The researcher recommends that policy directed towards an increment in Government Capital Expenditure and Gross Fixed Capital Formation to further reduce poverty rates be implemented. The researcher also recommends significant increase in Government spending on recurrent goods together with proper implementation devices to straighten the pathway towards poverty rate reduction in Nigeria. This would lead to significant reduction in poverty rates, breech the inequality gaps, reducing unemployment and stimulate economic growth and development.
TABLE OF CONTENT
Title Page - - - - - - - - - - i
Approval - - - - - - - - - - ii
Dedication - - - - - - - - - - iii
Acknowledgements - - - - - - - - iv
Abstract - - - - - - - - - v
Table of Content - - - - - - - - - vi
CHAPTER ONE: INTRODUCTION
CHAPTER TWO: LITERATURE REVIEW
2.0 Conceptual Literature - - - - - - - - 7
2.1Theoretical Literature - - - - - - - 7
2.2Empirical Literature - - - - - - - 13
CHAPTER THREE: METHODOLOGY
3.1 Methodology - - - - - - - 22
3.2 TheoreticalFramework - - - - - - - 22
3.3 Model Specification - - - - - - - 23
3.4 Method of Evaluation - - - - - - - 24
3.5 Data Required and Sources - - - - - - - 26
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULT
4.1 Analysis of Unit Root - - - - - - - 27
4.2 The Impact of Public Spending on Poverty in Nigeria - - - 28
4.3 Evaluation Based on Economic Criteria - - - - - 28
4.4 Evaluation Based on Statistical Criteria - - - - - 29
4.5 Evaluation Based on Econometric Criteria - - - - 31
CHAPTER FIVE: SUMMARY OF FINDINGS AND RECOMMENDATIONS
5.1 Summary of findings - - - - - - - - 32
5.2 Recommendations - - - - - - - - 33
5.3 Appendix - - - - - - - - 34
Nigeria, popularly referred to as the giant of Africa because of her endowments and riches in both human and natural resources, and also her affiliation with many powerful economies of the world, is still faced with one of the most challenging global problems –poverty.
Nigeria is still classified as economically retarded in terms of general social welfare. Over the years, it is evident that Nigeria has experienced some level of economic growth, but as a result of mismanagement of resources amongst other ills, poverty continues to thrive in the economy.
Over the years, public spending has been allocated into different sectors of the economy. Thus this has led to an increase in total budgetary allocation per annum. Despite this, there has minimal positive impact on poverty and inequality in the country; hence the galloping widening of the gap between the rich and poor which stifles the quest of the poor towards self-actualization and improved living standards (since a vast majority of them have very little funds).
According to French Economist, Esther Duflo, poverty can be controlled or even eradicated with the right policies. “All it takes is for politicians to translate research into action” implementing programs that have been shown to work.
According to Amartya Sen (1981), poverty analysis should focus on individuals’ potential to function rather than the results the individuals obtain from function. Hence government’s spending towards human capital development is one of the paths towards poverty reduction.
British Economist Keynes asserts that public spending should be increased when private spending and investment are insufficient. He explains that current spending which is expenditure on wages and raw materials and capital spending which involves physical assets likes roads, bridges, hospitals buildings and equipment go a long way toward bettering the society.
Public spending as a “tool” for suppressing poverty in Nigeria has been a very challenging issue majorly because of several political and societal vices inherent in the society. Vices like: misallocation of resources, embezzlement of funds, with corruption as the bedrock of all. This has been the key driver and propagator of poverty in Nigeria.
Government or public spending through subsidies and the likes, is primarily aimed at stimulating economic growth through harnessing and empowering members of the society regardless of the existing notion – corruption. Government or public spending is imperative to mitigating poverty in Nigeria.
Government Expenditure is a major component of national income. This means it is very crucial to ascertaining economic growth and development in a nation. Government expenditure or public spending is important tools geared at helping members of society attain some substantial level of stability (social welfare). For example, public spending through agricultural subsidies help encourage commercial farming. In spite of this, a vast majority of people doubt the impact of public spending due to the political ills, since the poverty rates has not reduced significantly.
Despite the discrepancies, public spending still remains a very promising tool towards reducing the rate of poverty in Nigeria. Consequently, this study seeks to ascertain the impact of public spending on poverty in Nigeria.
The objective of this study is to ascertain the impact of public spending on poverty in Nigeria from 1981-2015
The specific objectives are:
Based on the objective of this study, the study intends to ask the following questions:
The researcher has formulated these hypotheses as a guide to this study.
H01: There is no significant relationship between public spending and poverty in Nigeria
H02: Public spending has no significant impact on poverty in Nigeria
Results of this study will be beneficial to individuals, firms, industries, researchers, the government and its parastatals; and also international organizations. Members of the society will have a better view and understanding of the role of public spending and its relation to poverty. Government will also be exposed to the flaws hindering poverty rate reduction and procure better policies with good implementation.
This research seeks to evaluate the impact of public spending on poverty in Nigeria. The scope of this study will cover the periods of 1981-2015.
In this research, some of the factors which affected the researcher were: time, finance, collection of data and gathering of relevant materials. The data collected is Secondary data sourced from the National Bureau of Statistics, Nigeria; The Central Bank of Nigeria.