Government Expenditure and Welfare Outcomes in Nigeria: Evidence from the ARDL Bounds Testing Approach

By: Mathew Ayuba Ayaka, Jummai Sabo Ogumka

Pages: 363–383, Volume: 3, Number: 1

Published by: AEFUNAI Journal of Economics, Finance and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, 2/1/2026, 2026

ISSN (Electronic): 2536-6742

DOI:

Government Expenditure and Welfare Outcomes in Nigeria: Evidence from the ARDL Bounds Testing Approach

Abstract:

Nigeria continues to face persistent welfare challenges despite sustained growth and rising public expenditure. High multidimensional poverty, widespread informal employment, weak health and education outcomes, and limited access to basic services suggest that increased fiscal spending has not translated into improved welfare. Rising public debt and growing debt-service obligations further constrain fiscal space, reducing resources for critical social sectors. These concerns raise questions about the efficiency, targeting, and welfare impact of government expenditure in Nigeria. This study examines the causal relationship between government expenditure and welfare outcomes using an ex-post facto design with ARDL analysis for 1980-2023. Results show that while expenditure on health and education has long-term benefits, current levels of spending are insufficient to significantly reduce poverty. The study recommends improving budget execution and targeting to maximize welfare impacts.

Keywords: Government expenditure, Welfare outcomes, Human development index, Fiscal policy