Government Expenditure and Economic Development in Enugu State: An Accounting Perspective

The alignment between government expenditure patterns and measurable economic development outcomes in Enugu State has remained a subject of concern, particularly given the persistent infrastructure deficits and human development gaps observed despite growing budgetary allocations over the past decade. This study analyzed the relationship between government expenditure and economic development in Enugu State from an accounting perspective, covering the fiscal years 2018 to 2023. The study was anchored on the Keynesian expenditure multiplier theory, which posits that government spending stimulates aggregate economic activity and development outcomes. An ex-post facto research design was employed. Secondary data were sourced from Enugu State Ministry of Finance budget reports, Central Bank of Nigeria statistical bulletins, and National Bureau of Statistics publications. Variables examined included capital expenditure, recurrent expenditure, and development proxies such as per capita income, primary school enrollment, and infant mortality rates. Data were analyzed using vector autoregression and Granger causality tests. Findings showed that capital expenditure had a positive and statistically significant long-run effect on economic development indicators, while recurrent expenditure had a weaker and inconsistent relationship. The study concluded that expenditure composition matters as much as expenditure levels for development outcomes in Enugu State. It was recommended that the Enugu State Government should implement output-based budgeting reforms that prioritize high-impact capital investment over administrative recurrent costs.

Keywords: Government expenditure, economic development, capital expenditure, Keynesian theory, Enugu State