Re-Examining the Long-Run Relationship between Military Spending and Economic Growth in Nigeria: An Autoregressive Distributed Lag Approach

In recent times, Nigerian military expenditure has continued to increase owing to multiple insecurity challenges which has affected economic activities. Rising military spending is justified because no meaning economic development can be attained in the presence of insecurity. Thus, this study re-examines the longrun relationship between military spending and economic growth in Nigeria. The study utilized data on Real Gross Domestic Product (RGDP), Military Spending as a percentage of GDP (MGDP), Gross Fixed Capital Formation (GFCF), Exchange Rate (EXCH) and Balance of Trade (BOT) sourced from the World Development Indicators and CBN statistical bulletin. The study period covers from 1981 to 2024 while an Autoregressive Distributed Lag (ARDL) bounds test was estimated within a mixed order of integration. The result shows the existence of longrun relationship between RGDP and MGDP with a 4.72 percent error correction mechanism. The longrun model result shows that military spending exerts a positive and statistically significant longrun effect on economic growth. This suggest that security spending contributes to economic growth through security enhancement which spills over to the productive sectors. However, exchange rate is nonlinearly related to economic growth by having a lag effect while Gross Fixed Capital Formation drives growth in the shortrun. The study recommends caution while reducing military spending as a costless route to freeing fiscal space for other developmental priorities. A reduction in military spending that allows insecurity rise depresses long-run output. There is need to evaluate the composition and targeting of military spending rather than its aggregate level alone. This will concentrate resources on interventions with the most direct security-restoring and growth-stimulating effect.

The relationship between military expenditure and economic growth has occupied a persistent place in the development economics discourse

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