RHEMA UNIVERSITY JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES

GOVERNMENT EXPENDITURE AND UNEMPLOYMENT IN NIGERIA (1986 - 2024)

Dr Callistus Ogu, Oguh, Marcel Ifeanyi,, Dr Akamike Okechukwu, Ohuegbu Cynthia

January 18, 2026

Citation

RHEMA UNIVERSITY JOURNAL OF MANAGEMENT AND SOCIAL SCIENCES , Vol. 12 (1) (2026) , pp. 13-27

Details

ISSN: 979-37999
Published: January 18, 2026
Status: Published

Abstract

The study investigated the effect of government expenditure on unemployment rate in Nigeria for the period 1986 to 2024. The dependent variable is unemployment rate and the independent variables include capital expenditure, recurrent expenditure and credit to the private sector. Data were sourced from the Central Bank of Nigeria (CBN) statistical bulletin and analyzed using the Error Correction Model (ECM). The estimated short run result revealed that capital expenditure has a negative and significant effect on unemployment rate while recurrent expenditure and credit to private sector have positive effects on unemployment rate. However, only credit to private sector significantly increased unemployment rate. The speed of adjustment for correcting disequilibrium from the previous year to equilibrium in current year is 28.53 percent as shown by the coefficient of ECM. The study concluded that while capital expenditure is a strong tool for reducing unemployment, recurrent expenditure remains ineffective, and private sector credit though theoretically a driver of growth may worsen unemployment when misallocated or poorly regulated. It is recommended that government should prioritize productive capital investments in infrastructure, recurrent expenditure should be restructured to fund capacity-building programs, training and credit facilities should be directed toward productive sectors.

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