MATHEMATICAL ANALYSIS OF GOVERNMENT BUDGETARY ALLOCATION TO DEFENSE SECTOR ON ECONOMY GROWTH IN NIGERIAN FROM 1999 TO 2021 WITH REFERENCE TO IMF AND WORLD BANK 1.5% BENCHMARK

Abstract

The paper presents a systemic trend of budgetary activities in Nigeria with a particular focus on the allocation to the defense sector using time's series approach from

Three research questions were answered using secondary data gathered from the Central Bank of Nigeria's Statistical Bulletin, International Monetary Fund and World Bank. The data collected were analyzed using descriptive statistics. The results of the analysis showed that, the total budget to defense sector in Nigeria from 1999 2021 is $36.9 billion. It also revealed a difference of $71.4 billion between International Monetary Fund and World Bank benchmark 1.5% and the actual budget to defense sector. It further showed that the average percentage of 0.55% budget and the annual growth change of 0.02% were observed for the same period. The results also indicate that Nigerian and Bangladesh allocation were 0.95% and 0.24% far below the benchmark 1.5% as prescribed and Morocco allocation was far greater than twice of the benchmark by 0.34%. It was concluded that, the total budgetary allocation made to the defense sector within the period of this study in Nigeria is generally far less than the International Monetary Fund and World Bank benchmark by 0.95%. Based on the findings, it was recommended amongst others that, Nigeria government should adequately fund the defense sector by allocating at least 1.5% of her budget to defense sector as prescribed by International Monetary Fund and World Bank benchmark.