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 Rev. Fr. Moses Orshio Adasu University, Makurdi

JOURNAL OF ECONOMIC AND SOCIAL RESEARCH


Impact of Patterns and Structure of Defence Spending on Economic Growth in Nigeria



Abstract

Nigeria has faced significant security challenges in recent decades, including terrorism, insurgency, and regional conflicts. In response, the government has substantially increased its defense spending over the past decade. According to data from the Stockholm International Peace Research Institute (SIPRI), Nigeria's military expenditure grew from $1.6 billion in 2009 to $4.5 billion in 2020, making it the second-largest military spender in sub-Saharan Africa after South Africa. This paper investigates the impact of patterns and structure of defense spending on economic growth in Nigeria over the period 1990- 2023. Specifically, it examines the impact of recurrent defense expenditure, personnel expenditure, overhead expenditure, and inflation on economic growth.

The research employed a quantitative research design, utilizing secondary time-series data from reliable sources such as the Central Bank of Nigeria, National Bureau of Statistics, and the World Bank. The paper is anchored on the Keynesian theory of government spending and the neoclassical growth theory. The Autoregressive Distributed Lag (ARDL) bounds testing approach used to examine the long-run and short-run relationships among the variables. The findings reveal that while defense spending has risen substantially, its direct impact on economic growth is nuanced and complex. The study suggests that factors such as past GDP performance and inflation rates play a more pivotal role in shaping economic outcomes than defense expenditures alone.



Key words: Defense Spending, Economic Growth, Overhead Expenditure, Personnel Expenditure, Recurrent Expenditure

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