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This study examines the impact of government investments in education on economic growth in Nigeria over the period 1981-2012. Economic growth proxy by growth rate of GDP is the dependent variable while government capital expenditure on social services, recurrent expenditure on education, primary school total pupil enrolment and primary school pupils-teachers ratio are explanatory variables. Employing the OLS technique, the paper found that government capital expenditure on social services (education and health) and government recurrent expenditure on education have significant implications on economic growth over the period of this study. Total primary school pupil enrolment and primary school pupils-teachers enrolment were found to have mixed influences on economic growth. The low level of funding of the sector, poor conditions of service, high level of pupils out of school and the low pupil-teachers ratio in Nigeria were suspected to have accounted for these results. However, the goodness of fit of about 66 percent indicates that high potentials for growth exist in the educational sector. The paper therefore recommends an increase in government budgetary allocation to the education sector from the present less than 15 percent to UNDP/UNESCO requirement of 25 percent allocation to the sector, improvement in the welfare of educational staff and regular monitoring of funds and services rendered in the sector to ensure improved standards as possible ways of making education growth a friendly sector in Nigeria