Effects of Non-Oil Revenue and Corruption Control on Government Expenditure Performance in Nigeria

Background: Nigeria's historical reliance on oil earnings as its primary source of income has highlighted the necessity of improved governance and diversification to promote sustainable economic growth. The nation will promote economic growth and enhance the welfare of its people by combating corruption and diversifying its sources of income.

Aim: this study investigated how Nigeria's government spending performance is impacted by non-oil revenue and efficient corruption control. The study also evaluated how macroeconomic variables, particularly inflation and currency rates, affected the relationship between government spending and non-oil revenue.

Methodology: This study looked at pattern and connections between government spending performance and non-oil revenue of 30 years (1993-2022) using a longitudinal research approach and time series analysis. The ARDL model was used to estimate the correlations and dynamic interactions among the variables. Secondary data were gathered and analyzed using descriptive statistics to summarize important features.

Findings: With coefficients of 0.960056 and a p-value of 0.000, the research showed that average exchange rate inflation rate and non-oil revenue, all significantly improve the performance of government spending. On the other hand, with a coefficient of 0.957786 and a p-value of 0.000, the moderating effect of corruption control on the connection between non-oil revenue and government expenditure performance was significantly negative. The study looked at the variables short- and long-term effects. The findings show that government spending performance significantly declines by 0.092% in the short term and 0.154% in the long term for every 1% rise in the interaction term (non-oil revenue and corruption control). On the other hand, government spending performance significantly increase by 1.106% in the near term and 1.767% in the long term for every 1% increase in inflation rate. The analysis concludes that better government spending performance would result from combined benefits of non-oil revenue and corruption control.

Contributions: By offering actual data on the effects of non-oil revenue and corruption control on government expenditure performance in Nigeria, this study adds to the body of current work. The study provides a sophisticated knowledge of the impact of inflation and foreign exchange rates on the link between non-oil revenue and government expenditure performance by including them as control variables. The results imply that macroeconomic instability, which is typified by inflationary pressure and exchange rate volatility, compromises the potential of non-oil revenue and corruption control to improve fiscal outcomes.

Recommendations: The study recommends that reduction of reliance on oil revenue, enhancement of collection and management of non-oil revenue, strengthening oversight functions, and corruption control should be encouraged by government to achieve prudent and efficient government spending.

Implications: The results of the study have important implications in all ramifications for Africa. Theoretically, it adds to body of knowledge regarding how government spending patterns are affected by nonoil revenue and corruption control, especially when considering macroeconomic variables like inflation and foreign exchange rates. Given that many African economies, including Nigeria, are heavily reliant on single stream of income, the study highlights the importance of diversifying revenue streams through non-oil-based sectors to enhance fiscal sustainability. Furthermore, policymakers in these economies would benefit from designing fiscal policies that strike a balance between corruption control, non-oil revenue and government expenditure, ultimately promoting sustainable development.

Researchers: Future researchers can replicate this study in other African nations as well as continent to assess the generalizability of the findings and country-specific variations in non-oil revenue performance and corruption control measures. Also, proxies for macroeconomic factors such as interest rate and debt levels can be worked on to provide broader recommendations.