THE IMPACT OF AGRICULTURAL EXPENDITURE ON AGRICULTURAL OUTPUT IN NIGERIA
Abstract: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.