Total Government Spending On Agriculture and Its Output Growth in Nigeria

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Volume 8 - February 2019 (02)

Abstract

This study examined the relationship between government spending on agriculture and its output over the period 1970-2015 using Engle-Granger (1987) two step modeling (EGM) procedure involving: cointegration analysis and error correction of parameter estimates. Additionally, Granger causality test was carried out to determine the direction of causation between government spending on agriculture and agriculture sectors output. Based on the data analysis, it was discovered that Total government spending on agriculture (TGSA) has significant effect on agriculture output (AGDP) in the long and short-run.; this relationship is statistically significant in the long run and in the short run. Spending on agriculture sector has the capacity to increase its output by 10.7% if the allocation increases by 1% in the long run while in the short run, one percent increase in government expenditure on agriculture will bring about 10% increase in agriculture output. The study concludes that public expenditure is very crucial instruments for economic growth at the disposal of policy makers in Nigeria and government expenditure on agriculture is basically related to agricultural development and recommends that efforts should be made to increase government funding on agricultural sector and also compliment it with stable macroeconomic policies in order to curtail the level of food shortage and overdependence on foreign food and as well increase funding on anti-graft or anti-corruption agencies like the Economic and Financial Crime Commission (EFCC), and the Independent Corrupt Practices Commission (ICPC) in order to arrest and penalize those who divert and embezzle public funds.

Keywords

Agriculture, Output Griwth in Nigeria

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Cite this Article:

Austin N. Nosike, Total Government Spending On Agriculture and Its Output Growth in Nigeria, American Based Research Journal 02(2019):28-41 DOI: 10.5281/zenodo.3456734