THE PATTERN OF FEDERAL GOVERNMENT EXPENDITURE ON ROAD CONSTRUCTION IN NIGERIA (1976 -1995)

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THE PATTERN OF FEDERAL GOVERNMENT EXPENDITURE ON ROAD CONSTRUCTION IN NIGERIA (1976 -1995)

Abstract:

The main purpose of this thesis is to validate Wagner’s law which states that as per capita income of a country rises, its public sector will grow in relative importance. In Nigeria, total government expenditure as a percentage of GDP has risen several fold since 1970. However, expenditure on road transport has either remained relatively constant or declined as a proportion of GDP. This thesis found that Wagner’s law appears to hold in aggregate terms for the period between 1976 and 1995 but most rapid expenditure increases were generally in the social services and administration. There was a declining share of the transport sector in the total public sector investment. The proportionate contribution of the road transport sector also declined contrary to expectation. The income-elasticity of road expenditure was less than one. There is no doubt that expenditures were limited by the dwindling revenues particularly from the oil sector. Investment on road transport in terms of public expenditure is a sine qua non for economic development. However, in over two decades of public expenditure programming, the goal of good road network all over the country remains elusive and the development outlook continues to be precarious. This thesis also examines the pattern of Federal Government expenditure on road construction, the xi degree of government commitment to it’s funding and the effect of such expenditure on the country between 1976 to 1995. Hence, the need to estimate it’s determinants appropriately. Several models are specified and estimated. The result indicates a positive correlation between government expenditure on road and population, Government Revenue, Density, Total government Expenditure. The thesis concludes that public expenditure management which recognises the unique role of road transportation is required in order to ensure that the sector obtains its right share of public financial support and to promote economic development. The thesis recommends that investment in critical infrastructure like road development, should discontinue to remain in public domain in the near future. For the time being, priority should be given to rehabilitating roads on the basis of their economic viability. Those with high economic viability should be accorded priority and completed expeditiously

THE PATTERN OF FEDERAL GOVERNMENT EXPENDITURE ON ROAD CONSTRUCTION IN NIGERIA (1976 -1995)

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