GOVERNMENT SPENDING AND AGRICULTURAL OUTPUT IN NIGERIA

Abstract

This work studied government expenditure on agriculture and agricultural output in Nigeria. It examined the effect of government spending on agricultural output in Nigeria from 1980-2018.The needed data were sourced from the CBN statistical Bulletins. The main analytical tools used are the Augmented Dickey-fuller test and the Autoregressive Distributed Lag model. The ADF unit root test result reveals stationarity among the variables at zero and one. This satisfies the requirement to employ the ARDL bound testing approach. The ARDL Bound test showed the existence of long run relationship among the variables. The findings revealed that government expenditure on Agriculture both capital and recurrent had significant relationship with agricultural output for the period under study. Whereas Commercial Bank loan to Agriculture and Agricultural Credit Guarantee scheme fund both are not significant in the determination of Agricultural output in Nigeria for the period under study. It further reveals that the most important variables that affect agricultural output in Nigeria in ascending order of importance are government recurrent expenditure on agriculture and government capital expenditure on agriculture. These findings imply that Policies that promote increase in government recurrent and capital expenditures on agriculture will increase agricultural output. The result of the study or policy attention also have important implications for policy attention, showing the preference order in policy attention.