Moderating Role Of Defence Spending In The Relationship Between National Security And Economic Growth In Nigeria

Abstract

This study examined the impact of defence spending, national security and economic growth in Nigeria over the period of 1990–2024, using the Autoregressive Distributed Lag (ARDL) approach. The study incorporates economic growth as the dependent variable, while terrorism index, defence spending, TIDS (as moderating variable), exchange rate, and foreign direct investment serve as explanatory variables. The bounds test result (F-statistic = 7.050273) confirms the existence of a long-run impact among the variables. The long-run estimates show that terrorism index and moderating variable between defence spending and terrorism index have a negative impact and statistically significant effects on economic growth, respectively, while defence spending, exchange rate and foreign direct investment have a positive impact on economic growth but are statistically insignificant at 5% level of significance, except defence spending is statistically significance at 5% level of significance, In the short run, the error correction term (–0.803997) indicates a 80% speed of adjustment toward equilibrium annually, means is negative, less than 1 and statistically significance at 5% level. The findings suggest that defence spending has not significantly enhanced the security-growth nexus in Nigeria, emphasizing the need for efficient resource allocation and improved security management. The study recommend that to optimize defence spending, government must implement rigorous monitoring and evaluation systems alongside regular independent audits.