Military Outlay and Economic Growth: The Scenarios of Lake Chad Basin Countries of the Republic of Chad and Nigeria

Innocent.U. Duru

Department of Economics, Renaissance University Ugbawka, Enugu State, Nigeria.

https://orcid.org/0000-0001-8958-0686

Millicent Adanne Eze

School of Business, Law and Social Sciences, Abertay University, Dundee, United Kingdom.

https://orcid.org/0000-0002-2951-4027

Bartholomew.O.N. Okafor

Department of Economics, Nile University of Nigeria, Nigeria.

https://orcid.org/0000-0002-3118-8224

Abubakar Yusuf

National Metallurgical Development Centre (NMDC) Jos, Plateau State, Nigeria.

https://orcid.org/0000-0003-3773-8183

Lawrence.O. Ede

Department of Business Administration, Renaissance University Ugbawka, Enugu State, Nigeria.

https://orcid.org/0000-0002-3545-7647

Abubakar Sadiq Saleh

Department of Banking and Finance, University of Abuja, Abuja, Nigeria.

https://orcid.org/0000-0003-2063-9621

DOI: https://doi.org/10.20448/journal.511.2021.81.12.26

Keywords: Military outlay, Economic growth, Cointegration, ARDL, Toda, Yamamoto multivariate causality, Nigeria, Chad.


Abstract

This study examined the relationship between military outlay and economic growth in the Lake Chad Basin countries of Nigeria and the Republic of Chad respectively by testing the causal link between these two principal variables. The data ranges used for Nigeria and Chad were 1981-2019 and 1983-2019 respectively. The econometric method employed for this study was the Autoregressive Distributed Lag Bounds approach to cointegration. The results revealed that Nigeria’s military outlay exerted a positive and insignificant relationship with economic growth. However, the Republic of Chad’s military outlay had a positive and significant link with economic growth. The results of the causality test showed that there was no causal relationship between real GDP per capita and military outlay in both Nigeria and the Republic of Chad. These findings for Nigeria and Chad imply that they can pursue the policy objectives of defence and economic growth independently. The study, thus, recommends that the policymakers of the governments of both countries should pursue the policy objectives of defence and economic growth independently. Furthermore, the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and other Related Offences Commission (ICPC), charged with the responsibility of fighting corruption should rise to the occasion and track down military officials that divert defence funds for individual gains in Nigeria.

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