Title:
Public Sector Infrastructure Financing and Unemployment in Nigeria: an ARDL Approach

Authors:
Charles OGBOI, Yimka S. A. ALALADE, Olayemi S. NASIRU, Nigeria

Abstract:

Economic performance measures how well an economy is functioning and is a focal point of any responsible government. Nigeria's economic performance has remained sluggish, evidenced by high unemployment rates in the country. Existing studies suggest a linkage between low or non-existent public infrastructure financing and labor force redundancy within an economy. Hence, this study examined the effect of public sector infrastructure financing on unemployment levels in Nigeria. Utilizing an ex post facto research design, the study employed data from the 2023 editions of the CBN Statistical Bulletin and the World Bank’s World Development Indicators. Descriptive statistics and the autoregressive distributed lagged (ARDL) techniques were employed to analyze the individual effects of public sector infrastructure financing variables (road, education, housing, health) on unemployment rates at a 5% significance level. Results indicate that public sector infrastructure financing had significant influences on the unemployment rate both in the short run and in the long run (Adj.R² = 0.62, F(4, 33) = 9.42, p ˂ 0.05); education infrastructure financing exhibited significant positive effects on unemployment rate in the short run (β=0.35, t = 3.0976) and long run (β=0.27, t = 2.513). The study concluded that public sector infrastructure financing has a significant positive effect on the unemployment rate, and if optimized, is an appropriate investment vehicle for relevant Ministries and Departments (MDA) and other policymakers to lower high unemployment rates, while improving economic performance in Nigeria.

DOI: https://doi.org/10.51505/IJEBMR.2025.9521