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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Government Sectoral Expenditure in Pension and Gratuities and its Implication to the Economy, Econometric Evidence from Nigeria

Clifford Anene Ezema

http://dx.doi.org/10.6007/IJARBSS/v9-i9/6275

Open access

The study examined the responsiveness of economic growth to government expenditure in Nigeria. Specifically, the study investigated the responses of pensions and gratuities expenditure on real gross domestic product in Nigeria. Thus, pensions and gratuities served as the independent variables while real gross domestic product served as the dependent variable. The study covered the period 1981 to 2016 and data were collected from the Central Bank of Nigeria (CBN) Statistical Bulletin. To analyze the data, the study employed Ordinary least square model and the Error Correction Mechanism (ECM) technique as the analytical tool. Findings showed that pensions and gratuities expenditure of government has a positive and significant response on economic growth in Nigeria in the long run. The study recommends, amongst others, that the government should spend more on settling pensions and gratuities as a way to increase aggregate demand and foster more economic growth in Nigeria.