JEEE Publications


Musa, Nuhu 1 &  Maji,Ali2


1Dept. of Economics, Kogi State University Anyigba, Kogi +2347060526595

2Dept. of Economics, Kogi State College of Education, Ankpa, Kogi, +2347058567161


The paper empirically examined the impact of educational funding on national development in the 21st Century Nigeria. The focus of this paper is on the long-run relationship between educational funding and national development. The study used annual time series data from 1986-2015, sourced from World Bank, Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics. We employed the method of co-integration and granger-causality test. The variables used in the study were tested for stationarity using the Augmented Dickey-Fuller (ADF) unit root test. We found that the variables were non-stationary at their levels, but became stationary after first differencing. We applied the Johansen Co-integration to test for the long-run relationship among the variables. The result revealed a long-run relationship among the variables. The dependent variable, economic growth (proxy by RGDP) co-integrated with selected variables namely; human capital (HUK), recurrent expenditure on education (REE), capital expenditure on education (CEE), and literacy rate (LIT).With regard to the Granger causality test, bidirectional causality was established between economic growth and recurrent education expenditure in Nigeria, supporting Wagner’s law of Increasing State Activity. Furthermore, the empirical result also revealed that human capital and recurrent expenditure on education had a positive and statistically significant effect on economic growth in Nigeria. However, the capital expenditure on education, which is expected to stimulate economic growth, was found to be insignificant in the long-run and this is contrary to a priori expectation. The factor that could account for this insignificant relationship could be the trend of corruption, gross misappropriation and diversion of public funds. The study, therefore, recommended an urgent need to instill fiscal discipline in the education sector to checkmate the level of corruption. Also, the government should increase budgetary allocation to education in the 21st century to meet up the United Nations’ benchmark.


Keywords:  Educational funding, capital expenditure, recurrent expenditure and co-integration.
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