Impact of Government Security Expenditure on Crime Rate in Nigeria

Abstract

This paper examined the impact of government security expenditure on the crime rate in Nigeria, with a view to revealing how government recurrent and capital expenditures on security affect the crime rate in Nigeria. The major source of data was secondary, specifically the Central Bank of Nigeria (CBN) Statistical Bulletin and the annual reports of the Institute for Economics and Peace. The original functional model of Mohammed and Abu (2016) was adapted, using Ordinary Least Squares (OLS) as the estimation technique. However, the natural logs of the data for the dependent variable, Global Terrorism Index (GTI), and the independent variables, Government Capital Expenditure (GCAPEX) and Government Recurrent Expenditure (GREXP), except inflation, were taken before carrying out the analysis, so as to reduce the impact of outliers dominating the OLS estimates and to stabilize variance across levels by correcting heteroscedasticity. The results of the estimated regression model reveal that two of the independent variables, total capital expenditure and inflation, maintain a negative relationship with the crime rate in Nigeria (proxied by the Global Terrorism Index), while government recurrent expenditure (GREXP) maintains a positive relationship with GTI. The results imply that a 1% increase or decrease in GCAPEX caused about a 26% increase or decrease in the average crime rate in Nigeria. Similarly, a 1% increase in inflation (INFL) brought about a 1.3% decrease in the average crime rate in Nigeria, and vice versa. This result thus implies that if government increases capital expenditure in the security sector, the crime rate would be scaled down; it also means that a high level of inflation is impeding the fight against insecurity in Nigeria. Since capital expenditure has a strong influence in stemming the tide of crime rate in Nigeria, the study therefore recommends that government capital spending on security should be strategically increased without impeding growth and development in other sectors of the economy, and that effective monetary and fiscal policies be put in place to reduce the high inflationary trend in the country.