Al-Hikmah University Journal

Regardless of the several studies, there is a dearth of studies assessing the effects of government size using Armey’s curve on economic growth in Nigeria. Hence, this study examines the effects of government size on economic growth in Nigeria from 1993 to 2022. The study employed time series techniques. Different combinations of 13 explanatory variables feature in the estimated equations. These 13 explanatory variables comprise 5 conditioning variables and 8 explanatory variables of primary interest because they serve as government expenditure measures. Drawing on data from CBN, IMF, and World Bank, the Autoregressive Distributed Lag (ARDL) estimation method was used in estimating all the models after ensuring the validity of the estimates through suitable diagnostic tests. The study found that government expenditure has a positive and significant effect on economic growth and any addition beyond the required threshold values of 14.089 per cent will retard growth. Accordingly, this study recommended that policymakers maintain a threshold level and encourage capital expenditure to foster economic growth in Nigeria.