GOVERNMENT EXPENDITURE AND POVERTY ALLEVIATION IN NIGERIA, 1970 – 2016

This study examined the effect of government expenditure on poverty in Nigeria. Expenditure was disaggregated into recurrent and capital expenditures. The Auto-regressive Distributed Lag (ADL) technique was adopted to estimate their impact on poverty rate. The results showed a negative relationship between government recurrent expenditure on administration and poverty; a positive relationship between recurrent government expenditures on social and community services and poverty rate. Also, on the results of the effect of capital government expenditure on poverty rate in Nigeria, there was a positive relationship between government capital expenditure on administration and poverty; the relationship between capital expenditure on economic, social and community services and poverty was negative; Government’s capital expenditure on transfers positively affected the rate of poverty. The Toda Yamamoto procedures causality results indicated a unidirectional causality from poverty incidence to recurrent expenditures on social and community services, economic services, and transfers respectively; and a bi-directional causality relationship between capital expenditure and poverty rate in Nigeria. It was recommended that capital expenditures of the Nigerian government should be effectively implemented as stipulated in the budget; Funds generated by the government should be geared into productive sectors; and government should minimize recurrent spending