Effects of Government Expenditure on Agricultural Growth in Nigeria (original) (raw)

The study examined the effects of government expenditure on agricultural growth in Nigeria from the period of 1980 to 2014. This study was carried out against the background of the gradual decline in the agricultural sector output, which was largely due to rise in crude oil revenue in the early 1970s. The objectives of the study are: To determine the trend of public agricultural expenditure in Nigeria from 1980 and 2014; and also to examine the impact of public expenditure on agricultural output in Nigeria. To achieve these objectives, the study adopted Multiple Regression using time series data obtained from the CBN, NBS and FMA for a period of 35 years that is 1980 to 2014. In this study, the dependent variable was the value for agricultural output, whereas the independent variables are the Public Agricultural Expenditure, Commercial Bank Loan and Advances on Agriculture; and Real Interest Rate. The model was tested using Descriptive statistics, Durbin Watson Statistics to analyse the significant relationship between the dependent and independent variables. The result shows that government expenditure on agriculture exerts positive insignificant impact on agricultural output. This implies that increase in the public expenditure on agriculture and commercial bank loans and advances on agriculture in the country though often lead to increasing agricultural output, but such increase is not significant enough. The study also revealed a significant negative relationship between the real interest rate and agricultural output in Nigeria during the period. The study thereby recommends that; government should increase the fraction of its budget that goes to the agricultural sector; regulatory authorities in the financial market should work out modalities for provision of adequate loans and advances to farmers; and lastly, Government should also streamline the monetary policies of the country to keep close check on the real rate of interest so as to reduce the deleterious influence.

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