Paper Title
Forgone Expenditure in Nigeria: Implications for Education Growth

This paper examined the impact of forgone education expenditure on Nigeria’s education growth using annual data covering the period 1981 to 2019 by applying econometric techniques to test empirically the hypotheses developed. Cointegration analysis is introduced to capture long-run & short-run relationships among variables using systems simultaneous equation. This is because Vector Autoregressive (VAR) treats all variables as endogenous. Following this approach, employing VAR through Vector Error Correction Mechanism (VECM) procedure, the simultaneous equation was simulated. The study further conducted ex-ante forecasting involving impulse response and variance decomposition simulations to evaluate the period under study. Also the study examined causality relationships among series using the VECM Granger causality approach to understand short-run causality among variables via F-/Wald test simulation. Later, the systems simultaneous equation aforementioned is estimated employing Ordinary Least Square (OLS). Empirical results indicate that forgone education expenditure have a positive and significant relationship with education growth, whereas real education expenditure has a negative relationship with education growth in its three lags. The VECM Granger causality result also shows that forgone education expenditure cause education growth. A further review of the impulse response function indicates that forgone education expenditure will positively contribute to education growth in the short-run and long-run. Based on the findings, this study recommends that government should increase the share of education expenditure to meet with the UNESCO recommendation of 15-20 percent. In addition, government expenditure on education should be properly managed in order to enhance education growth. Keywords - UNESCO; Education Expenditure; Education Growth; VECM.