ABSTRACT

The study examined the impact of public spending on poverty reduction in Nigeria covering the period 1981 – 2014. The variables used for the analysis were poverty rate as the dependent variable and public capital spending, public recurrent spending, gross domestic product per capita and domestic investment as the independent variables. The time series data used for this study were obtained from CBN statistical bulletin and National Bureau of Statistics. The data were analyzed using ADF test, Johansen co-integration test, ordinary least square method (OLS). The finding of the study revealed that public capital spending has a direct (positive) and non-significant relationship with poverty reduction, while public recurrent spending has an indirect (negative) and non-significant relationship with poverty reduction in Nigeria within 1981 – 2014. Other variables such as gross domestic product per capita has an indirect and significant relationship with poverty reduction, while domestic investment has a direct and significant relationship with poverty reduction in Nigeria within the period under review. The study recommends that Nigerian government should ensure that its capital expenditure is properly managed in a manner that it will reduce the poverty rate in the country, endeavour to pay the workers their salaries on time in order to avoid increase in poverty rate and should adopt policy mix, since only fiscal policy cannot reduce the poverty rate in Nigeria.