This study examined the effects of capital budget expenditure on administration on public investment in Nigeria between 1986 and 2023. Data for the study were gleaned from the publications of the Central Bank of Nigeria (CBN) Statistical Bulletin, Budget Office of the Federation and World Bank World Development Indicators (WDI). Public investment (proxied by government gross capital spending), capital budget expenditure on administration, capital budget expenditure on economic services and inflation were the variables of interest considered in the study. The Auto-regressive Distributed Lag (ARDL) and the Error Correction Model (ECM) diagnostics were utilized in the data estimation. Findings revealed capital expenditures on administration and economic services exhibited positive and statistically significant relationship with public investment in Nigeria. Conversely, inflation indicated positive but statistically insignificant relationship with public investment in Nigeria. The Error Correction Term (ECT) indicates that approximately 52.6% of the short-run disequilibrium is corrected each period, confirming the existence of a stable long-run equilibrium relationship among the variables. The study concludes that capital budgeting plays critical role in driving public investment in Nigeria. The study recommends that enhancing capital budget expenditure on administration and economic services is critical for stimulating public investment, as these sectors provide the institutional and infrastructural backbone necessary for sustained growth. While inflation exerts no significant long-run effect, prudent management is still recommended to safeguard the real value of investments, alongside stronger monitoring and accountability frameworks to ensure that capital allocations translate into tangible developmental outcomes.
Ogu et al. (Sun,) studied this question.