GASPRO International Journal of Eminent Scholars

Since the mid 1980s, Nigeria has experienced a Gross Fixed Capital Formation (GFCF) of less than 20%; being the reason for the meager capital project as well as economic performance as such resulting in inflation, high interest rate, infrastructure and capital project neglect. Recurrent expenditures has 68% attention from government while capital projects has been allocated 32% revealing the deterioration of the neglect. The study seeks to examine the influence of cost expenditure of Quarrying and Mining works as well as transportation construction works on gross fixed capital formation in Nigeria for the period of(1985-1999) and (2000-2013). The study assumed that between the study period, there was political and social stability and fluctuation in exchange rate of naira/dollars have no effect on the study. Cost Expenditure on transportation construction works (roads,rails,water, air) had deviated following its weak level of significance of 0.39 and 0.15 for the two time period when compared with 0.05 (5%) level of significance tested. It is found that cost expenditure on quarrying works has high reliability and consistency due to its 0.00 and 0.03 level of significance over the years studied. The study concluded that cost expenditure on quarrying works has a highly positive significant influence on gross fixed capital formation while cost expenditure on transportation works has averagely contributed to GFCF; and the reason being that this sector suffered government neglect, fraud, embezzlement of funds, divergence, inadequate budget allocation, among others. The study recommend that more allocation should be channel toward infrastructure and capital project than on recurrent expenditure as such policy will help boost GFCF in Nigeria.