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Background of the Study
        Education is an important area where governments in both developed and developing economies channel its resources. The belief is that the outcome from education expenditures will move a long way in transforming human, economic, social, cultural activities and other aspects of the people’s lives. But however, the paradox accompanying this belief is that, despite the heavy investment in education, there exist no solid evidence of growth – promote externalities of education in Nigeria, but rather, education expansion further deepens social inequalities and inculcate harmful social changes such as cultism, industrial disputes, rent seeking, brain drain among other social means in the Nigeria school system and the society at large.
Fund for education comes from different sources. The major one for all forms of government is public revenue from taxation and proceeds from petroleum or crude oil. Education funds are reported to be shared among primary, secondary and tertiary educational levels in the ratio of 30%, 30% and 40% respectively (Balani 2004). The public funding includes direct government expenditure (for teacher’s salaries and instructional aids) as well as indirect expenditure in the form of subsidies to households such as tax deductions, loans, scholarship, and grants. It also includes sources of funding education explored by the government like the payment for Education Tax Fund (ETF) established in 1995, Petroleum Trust Fund (PTF). Education Tax Fund ensures that companies with more than one hundred employees contributes four percent of their pre - tax earnings to the fund. It is majorly for capital expenditures. The major sources of fund that the Nigerian government has are federal taxes and duties on crude oil (petroleum), profits from exports and imports that form the revenue of the federal account and the centrally collected Value Added Tax (VAT) introduced in 1996.
The Nigerian government was capable to finance education sector considerably, as a result of income generated from the sales of oil, whose discovery brought fundamental changes to the economy of Nigeria. The government of Nigeria allocated large amount of the wealth made from the sales of oil into expenditures in various sectors including education.
Government’s main objective according to National Policy On Education (NPE) thereafter engendered indiscriminate establishment of institution and increased student enrolments to mention a few. According to Nwankwo (2002), enrolment in Nigeria higher education increased from 14, 470 in 1976 to 176,600 in 1996. This pace at which education had grown in Nigeria particularly since political independence is unparallel elsewhere among African nations (Adesina 2008).
Statement of the Problem
        Education in Nigeria is presently in crisis. There is no enough money to spend on Primary, Secondary and Tertiary education. Education sector complains of under-funding in which the government accuses the sector of ineffective use of available resources. The donors argued that public spending on education should be minimized. At the same time there are developing and growing changes at the education level.
        However, there are increasing complaints about low standard of education at a period when globalization demands much more from the educational system in terms of preparation of skillful labour force.
There is a common notion which is generally felt in the Nigeria’s education sector. The incessant strikes embarked on by the ASUU and NASUU, Teachers in the secondary and primary schools etc have really affected the education sector. Owing to this, the academic calendar have been affected, students and pupils have stayed enough than required in their studies. To the employed staffs in the academic institutions, their expectations boil down to the inability by government to meet up the new salary scheme. More so, it is contributed to the poor state of the learning institutions, which the attention of the government is drawn on. These have prompted the researcher to analyze the implication of government expenditure on the Nigeria’s economic growth.
Objective of the Study
The main objective of this research is to determine the effect of government funding on educational growth in Nigeria. Other specific objectives are as follows;
(i) To determine the extent to which government expenditure on education leads to economic growth in Nigeria.
(ii) To find out the limitations and barriers to public expenditures to educational growth in Nigeria.
(iii) To proffer policy measures (recommendations) that will encourage development in the educational sectors in Nigeria.
Significance of the Study
The way federal and state governments of Nigeria now faces development challenges that are key to both welfare improvements for the general population and enhancement of the educational sector in particular, this study will act as a source of information on various methods of adopting effective measures of improving the education sector. It will serve as a reference point to the policy makers to adequately plan education funding.
        The findings of this study will also provide an econometric basis upon which to determine the effect of government funding on educational growth in Nigeria. Hence, policy makers will be able to design an articulate and comprehensive policy with respect to educational management in Nigeria.  Also this research will provide an objective view to the relevance of education to Nigerian economy. The findings of this research will also serve as good resource materials for those that intend to make further research on the effect of government funding on educational development in Nigeria.
        It will help students and researchers to do further work related to this research project. However, institutions of learning that may come across this research work can see the need to increase funding of the education sector without solely depending on the government.
Delimitation of the Study
        The study examines the effect of government funding on the growth of education in Nigeria from 1990 - 2013.
 Research Questions
        This research study, thus, should be viewed as a preliminary analytical exercise designed to address basic questions about government funding on the education sector in Nigeria. These include the following:
1.    Does government expenditure promote education growth in Nigeria?
  1. To what extent has the barriers and limitation to educational growth been met?
  2. Has government funding on educational sector led to the improvement of the standard of education in Nigeria?
Hypothesis of the Study
The following hypotheses are formulated to guide the study:
1.  Ho: There is no significant relationship between Government expenditure and educational growth in Nigeria.
H1: There is a significant relationship between Government expenditure and educational growth in Nigeria.
2.  Ho: There is no significant effect on public expenditure in education and economic growth in Nigeria.
H1:    There is a significant effect on public expenditure in education and economic growth in Nigeria.
Limitations to the Study
This study would have made to cover large population and geographical area but was limited by shortage of time and finance.

Definition of Terms
The following are the major terms used in the research with their different operational definitions;
1.  Expenditure: is the countable or uncountable act of expanding or paying out or an expense.
2.  Globalization: the process of making world economy dominated by capitalist models.
3.  Capital: the means to acquire goods and services, especially in a non-barter system.
4.  Revenue: all income generated for some political entity’s treasury by taxation and other means.


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