Publications

Defense spending can have both positive and negative impacts on an economy. On the positive side, it can stimulateeconomic growth by increasing demand and enhancing security. However, it can also have negative consequencesby displacing investment. In countries with a domestic defense industry, military expenditure tends to have a moresignificant positive effect on economic growth. However, in the case of Nigeria, which lacks a domestic arms industryand relies heavily on importing military equipment, any increase in military spending is more likely to worsenNigeria's trade deficit rather than boost its GDP. This paper examines the effects of defense expenditure on theeconomy. While some studies have found a direct positive relationship between military spending and economicgrowth, these studies were conducted during peaceful times and not in the midst of security challenges. Therefore,in developing economies like Nigeria, which face security challenges, the conditions necessary for defense spendingto drive economic growth may be absent. For instance, looking at Nigeria's 1986 budget, only 5.69 percent ofgovernment expenditure was allocated to the defense sector. This percentage fluctuated in the subsequent years,with an increase during the early years of democratic governance, followed by a decline. This suggests that whencountries grapple with security challenges and are compelled to allocate resources to their military at the expenseof other pressing needs, such spending may not yieldKeywords: Defense, Expenditure, Economy, Budget and Impact