Public Spending and Poverty Reduction in Nigeria

The purpose of this paper is to examine the efficacy of government spending on poverty reduction in Nigeria from 1980-2022 using data from Central Bank of Nigeria statistical bulletin and National Bureau of Statistical Bulletin 2023. The study employed a thorough pre-estimation diagnostic test and econometric technique under the framework of Ordinary Least Squares (OLS) to estimate the model. Findings revealed that government expenditure on agriculture (GEA) has a positive and significant impact on poverty reduction indicating that government expenditure on agriculture (GEA) is a major factor that reduces poverty in Nigeria. The findings as analyzed in the empirical result of aggregate model revealed that government expenditure on health (GEH) has a negative and insignificant impact on poverty reduction indicating that government expenditure on health (GEH) is not a major factor that reduces poverty in Nigeria. The findings as analyzed in the empirical result of aggregate model revealed that government expenditure on Education (GEE) has a negative and insignificant impact on poverty reduction indicating that government expenditure on Education (GEE) is not a major factor that reduces poverty in Nigeria. The study recommends that government should increase their spending on health and educational sectors in order to create employment opportunities, increase man power training, induced output and reduce the levels of poverty in Nigeria.