THE IMPACT OF AGRICULTURAL EXPENDITURE ON AGRICULTURAL OUTPUT IN NIGERIAAbstract:
Agriculture contributes immensely to the economic development in Nigeria, efficient and effective management of the sector will enable the country to feed its increasing population, provide job opportunities, foreign exchange earnings and the provision of raw materials for the industries. However, due to policy and agriculture expenditure inconsistency coupled with political instability the sector has not been performing up to its expectation. This study makes immense contribution to the existing arguments by empirically analysing the effect of government agriculture expenditure on agriculture growth in Nigeria, using time series data from 1961-2013 obtained from the Central bank of Nigeria. Granger causality technique of data analysis was used in testing the secondary data. Agriculture gross domestic product (AGDP) was used as a proxy for agriculture growth, while government expenditure on agriculture was used as indicators of government expenditure on agriculture (GAEXP). The result of this study shows bidirectional causality between Government agriculture expenditure and agriculture GDP in Nigeria at the fourth lag lengths between 1961 and 2013. In other words agriculture expenditure granger causes agriculture GDP and also agriculture GDP granger causes agriculture expenditure. The study therefore recommends an urgent attention to be given to consistent budgetary allocation towards agricultural sector. The study also suggest, that government expenditure on agriculture sector should be continuous and not only in the time of falling agriculture product. This will continuously increase agriculture output and growth as well.