The Impact of Government Expenditure on Manufacturing Output in West African Countries (1986- 2020)

Abstract

This study broadly investigated the impact of government expenditure on manufacturing output in West African countries. The data for this study spanning from the period of 1986 to 2020 and the data were sourced from the Central Banks of various countries involved in the study as well the World Bank Development Indicator. The study utilized econometric technique of ARDL Panel Model to explore the relationship between government expenditure and manufacturing production in six selected ECOWAS countries of Benin Republic, Ghana, Nigeria, Mali, cote d’lvoire and Togo. The results of the long-run estimate showed that virtually all the variables involved in the study have insignificant positive relationship with manufacturing output while only capital expenditure has insignificant negative relationship with manufacturing output. The indication is that capital expenditure has not significantly contributed to the output growth of manufacturing sector in West Africa. Based on the findings, governments of West African countries should endeavour to channel their expenditure on productive sector of the economy as well as maintaining the judicious use of these resources. Government of West African countries should work on institutional quality and also improve their policy measures on interest rate, exchange rate and inflation rate.