CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Manufacturing sector development is a basic tool for attaining a desired level of economic growth and development by any nation hence, countries across the world develop and implement policies on industrialisation even our dear country: Nigeria (Echekoba and Ananwude, 2016). Theoretically, promoting economic growth and development through government expenditure is mainly viewed from two distinctive perspectives. The first is the Keynesian and endogenous theories proponents who posited that planned sectorial government expenditure is a veritable tool to achieving sustained growth. The classical together with neoclassical theories is the second aspect which in Twumasi [2012], view governments as inherently bureaucratic and less efficient, and as a result they tend to hinder rather than facilitate economic growth. Beyond the Keynesian and Neoclassical arguments, there are also the Ricardian economists who are of the opinion that a country could experience growth and development without government expenditure. In order words, changing the consumption pattern of citizens is cumbersome notwithstanding the amount of money the government injects in the economy through expenditure. The term government capital expenditure is defined as a spending on assets. It is the purchase of items that will last and be used time and time again in the provision of good or service. In the case of government, examples would be the developing of a new hospital, the procurement of new computer equipment or net works, constructing new roads etc. (IMF, 2010). Also according to CBN (2011), Government expenditure is the money spent on goods that are classified as investment goods. This is to say, spending on things that last for a range of time. This may also involve investment in hospitals, schools, power sector, telecommunication and road construction. Government expenditure plays a role in output and capacity utilization of manufacturing sector in Nigeria has been of more concern, despite the fact that, the government had embarked on several policies aimed at improving the growth of the Nigerian economy through the contributions of manufacturing sector to the economy and capacity utilization of the sector (Adebayo, 2010; Peter and Simeon 2011 and Loto, 2012). Manufacturing sector refers to those industries which are involved in the manufacturing and processing of items and indulge or give free rein in either the creation of new commodities or in value addition (Adebayo, 2011). According to Dickson (2010), manufacturing sector accounts for a significant share of the industrial sector in development countries .
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