Government Expenditure and Private Consumption in Nigeria:

Further Empirical Evidence

Abstract

The study investigates the effect of government expenditure on private consumption in Nigeria from the period of 1980 and 2018. Using Autoregressive Distributed Lag (ARDL), the result of short-run parameters shows that government expenditure, foreign direct consumption and population have positive and significant relation with private consumption while import has negative and significant relation with private consumption. Concerning the long run parameters, total investment and export have a significant positive relation with private consumption while import exerts a negative significant effect on private consumption. Thus, there is a need for efficient and effective policy that will encourage foreign investment to increase government revenue. This supports the Wagner’s Law 
that growth of national income raises the size of the public sector.