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Author(s): Udeze Chike Romanus (Ph.D.), Attamah Nicholas (Prof.), Onwuka Irene Nkechi (Ph.D.), Ugwunna Ogochukwu Theresa (Ph.D.), Okaforocha Chika Maureen (Ph.D.), Ezeife Agbachukwu Okeife.

Volume/Issue: Volume 8, Issue 2 (2025)

Page No: 63-81

Journal: African Journal of Economics and Sustainable Development (AJESD)

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Abstract:

This study explored the interaction between private and public investments and its effect on economic growth in Nigeria over the period 1986 to 2021. The analysis utilized annual time series data, including real Gross Domestic Product (GDP), private investment (proxied by gross fixed capital formation), public investment (proxied by government capital expenditure), exchange rate, and interest rate spread. The Autoregressive Distributed Lag (ARDL) Bounds Testing approach was employed to examine the existence of both short-run and long-run relationships among the variables. The objective was to assess the effect of the interaction between private and public investment on economic growth. The empirical results revealed that the model variables were cointegrated, suggesting a stable long-term equilibrium relationship. Furthermore, the interaction between private and public investment were found to have a statistically significant impact on economic growth in both the short run and the long run, highlighting the complementary nature of these investment types. The study recommends that government policy should focus on enhancing the synergy between public and private investment through the provision of critical infrastructure at reduced economic costs. Also the creation of a business-friendly environment to fosters sustainable economic growth in Nigeria.

Keywords:

Private and public investment, economic growth, real gross domestic product, ARDL, Nigeria.

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