Impact of government expenditure on education: The Nigerian experience

Zita Chika Obi; Cyril Ogugua Obi

Abstract:

Nigeria has over the years invested substantially to improve the educational attainment of the labour force and to raise productivity but yet still faces declining real output and slow economic growth. The paper focuses on the impact of education expenditure on economic growth as a means of achieving the desired socio-economic change needed in Nigeria. The study uses time series data from 1981 to 2012. The Johansen’s co-integration analysis and ordinary least square (OLS) econometric techniques were used to analyze the relationship between gross domestic product (GDP) and recurrent education expenditure. Findings indicate that though a positive relationship subsists between education expenditure and economic growth, but a long run relationship does not exist over the period under study. The study observed that this puzzle is attributable to labour market distortions, redundancy of the workforce, industrial dispute and job discontinuities as well as leakages in the Nigerian society such as brain drain, among others. In conclusion, the above study has shown that educational sector has not been productive as expected. This is evidenced by the poor quality of graduates, increasing cases of cultism in schools and high rates of drop-outs. The paper further suggests the improvement of the education system through efficient use of public resources through good governance, accountability and transparency. Also, efforts should be made by policy makers to come up with policies that would check, preserve and protect the plight of educational capital to other countries