Abstract

This paper examines the pattern and structure of defence spending and the impact on economic growth in Nigeria over the period 1980-2015. The study used the multiple regression specification to estimate the impact of defence expenditure on economic growth in Nigeria using the Aizeman-Glick (2003) model. A trend analysis for each of the variables of the study was conducted to observe the pattern of movements in the variables used as proxies for defence expenditure and economic growth in Nigeria over the study period. Result of the trend analysis reveals a common characteristic that exist in defence expenditure allocation decisions in Nigeria and that defence expenditure in Nigeria is largely a composition of the recurrent expenditure. Findings further reveal that defence expenditures during the period of study have both positive and negative impacts on the growth of Nigerian economy. While the impact in the short-run is negative, it is clearly positive in the long-run as shown in the estimated long run co-integrated coefficients and results of multiple regressions. Based on the findings, there is the need to plug leakages and increase defence allocation in the budget, to enhance the combat readiness of the Nigerian armed forces in order to create a peaceful environment for growth.