Effect of Capital Expenditure on Unemployment Rate in Nigeria

This study investigated the effect of capital expenditure on the unemployment rate in Nigeria from 1981 to 2020. Data for the study was obtained from the Central Bank of Nigeria's Statistical Bulletin and the World Bank's World Development Indicators. Several diagnostic tests were performed to assess the relationship between the variables, including descriptive, correlation analysis, unit root test, Johansen co-integration test, and error correction model (ECM) approach. The results of the unit root and Johansen co-integration tests lead to the use of the ECM approach to determine the impact of capital expenditure on unemployment rate in Nigeria. The dependent variable was unemployment rate, and the explanatory variables were capital expenditure, tax revenue, labour force, compensation of employees, gross capital formation, gross domestic product, and import of goods and services. The findings revealed that four of the seven explanatory variables were statistically significant, with capital expenditure and gross capital formation having a negative and significant impact on unemployment rate in Nigeria. In contrast, labour force and gross domestic product had a positive and significant impact on unemployment. The study recommends that the Nigerian government should increase its capital expenditure to generate more employment opportunities, which will enhance labour productivity and reduce unemployment rate. Additionally, the government should carefully monitor the allocation of capital expenditure to productive sectors that will achieve the desired objectives.

本研究探讨了1981年至2020年尼日利亚资本支出对失业率的影响。研究数据来源于尼日利亚中央银行统计公报及世界银行世界发展指标。为评估变量间的关系，本研究开展了多项诊断检验，包括描述性分析、相关性分析、单位根检验、Johansen协整检验及误差修正模型（ECM）方法。单位根检验与Johansen协整检验的结果表明，应采用ECM方法来确定尼日利亚资本支出对失业率的影响。因变量为失业率，解释变量包括资本支出、税收收入、劳动力、雇员报酬、资本形成总额、国内生产总值及商品和服务进口额。研究结果显示，7个解释变量中有4个具有统计显著性：资本支出与资本形成总额对尼日利亚失业率产生显著负向影响，而劳动力与国内生产总值则对失业率产生显著正向影响。本研究建议尼日利亚政府增加资本支出以创造更多就业机会，从而提升劳动生产率并降低失业率。此外，政府应审慎监督资本支出向生产性部门的分配，以实现预期目标。