(a) What is public recurrent expenditure? [5 marks] (b) Give five reasons for the rapid increase in government expenditure in your country. [15 marks]

Answer Details

(a) Public recurrent expenditure. This is government spending on the day-to-day running of the state that recurs regularly and does not create a lasting physical asset. It covers items such as salaries and wages of civil servants, interest on public debt, maintenance of existing facilities, subsidies and general administration. It is contrasted with capital expenditure, which builds durable assets like roads, schools and hospitals.

(b) Reasons for the rapid increase in government expenditure in Nigeria.

1. Rapid population growth: a larger and fast-growing population demands more schools, hospitals, water and other public services, raising spending.
2. Provision of infrastructure: heavy outlays on roads, electricity, railways and ports needed for development enlarge the budget.
3. Rising cost of administration: creation of new states, ministries and local governments, plus higher salaries and pensions, increases recurrent spending.
4. Inflation: a general rise in prices means the government pays more for the same goods, services and projects.
5. Debt servicing: interest and principal repayments on growing internal and external debts consume an increasing share of the budget.
6. Defence and internal security: spending on the armed forces and police to maintain law and order has risen sharply.
7. Social and welfare services: expansion of education, health, subsidies and poverty-relief programmes adds to expenditure.

Examination reminder: the question asks for five reasons, so state five clearly and explain each with a short sentence rather than merely listing.