PUBLIC SECTOR EXPENDITURE AND ECONOMIC GROWTH: EVIDENCE FROM SUB-SAHARAN AFRICAN COUNTRIES
This study examined the influence of public sector expenditure on economic growth in Sub-Saharan Africa between 2000 and 2023, using panel ARDL technique. A relationship was established between government expenditure and economic growth within the period of study. In the short-run, government expenditures on health and public debt servicing have negative but significant influence on the economy, while government expenditures on education and defence have insignificant influence on the economy. However, in the long-run, government expenditure on education is positively insignificant. Government expenditures on health and defence have positive significance influence on economic growth (RGDP). Panel granger causality demonstrated a two-way relationship between government expenditure on education and economic growth. In addition, only RGDP granger caused government expenditure on defence and public debt servicing. Therefore, the study recommends that government should increase investments on education in order to enhance workforce productivity and economic performance in Sub-Saharan Africa.
Keywords: african, countries, economic, evidence, expenditure, growth, public, sector, sub-saharan