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Abstract:
The effect of increasing infrastructural development expenditure on economic growth in Nigeria is examine from 1989-2017.This study was motivated on the basics of the increasing public expenditure on infrastructure in Nigeria without a proportional increase in infrastructural development. The Johansen co-integration, Error Correction Model (ECM) and the Ganger Causality Test serves as the prime techniques of analysis. Public expenditure and economic growth variables were found to be non-stationary and co-integrated, thus substantiating a long-run equilibrium condition. The ECM result show that, the disequilibrium cause by infrastructural degeneration in the previous year is adjusted back to equilibrium at the speed of 20% annually. The Granger causality test revealed a unidirectional causality, running from gross domestic product to variables of infrastructure. Therefore, Wagner's law and Fiscial Illusion theory were found to be valid in Nigeria's case for the period of study. The recommendation is to improve government expenditure on health, and transport and communication infrastructures to checkmate the increasing cases of infant and maternal mortality rates, and outbreak of virus in Nigeria. A business-like approach to infrastructural expenditure and controls on infrastructural should be embrace by the government.
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