Cost of Governance and Public Sector Performance in Nigeria: An Empirical Analysis

Abstract

The growing demand for public goods and services such as education, healthcare, infrastructure, and security; as well as expanding scope of public sector operations has led to increased cost of governance globally including Nigeria. However, the performance of the Nigerian public sector remains alarmingly poor over the years, primarily due to issues like inadequate budgetary implementation. This motivated this study to investigate the effect of cost of governance on public sector performance in Nigeria. Secondary data were sourced from CBN Statistical Bulletin and National Bureau of Statistics NBS. The study employed robust least square (RLS) estimation method. The results showed that capital expenditure with (? = 7.543; p-value = 0.000); and debt service cost with (? = 6.662; p-value = 0.000) have significant positive effect on public sector performance, while recurrent expenditure with (? = -5.503; p-value = 0.000) has significant negative effect on public sector performance in Nigeria. The study concluded that cost of governance affects public sector performance in Nigeria. The study therefore recommended that government should monitor adherence to budget allocations, especially for capital projects, to ensure resources are used effectively in line with Sustainable Development Goal (SDG) 12 of Responsible Consumption and Production.