GOVERNMENT EXPENDITURE AND AGRICULTURAL OUTPUT IN NIGERIA

ABSTRACT Agriculture remains the mainstay of mankind. Wise nations all over the globe give it a priority by developing and exploiting this sector. Despite this, the productive capacity of the sector has declined in recent years as a result of low yield resulting from constrained or limited. Amidst all this is how government expenditure affects the agricultural output in Nigeria. In view of this, this study examined the impact of government expenditure on agricultural output in Nigeria using yearly time series data collected from the Central Bank of Nigeria Statistical Bulletin (CBN), National Bureau of Statistics (NBS), world bank data and Nigeria Meteorological Agency (NIMET) for the period 1983 to 2023. The study made use of multiple regression analysis based on the Autoregressive Distributed Lag (ARDL) bounds testing approach, the descriptive statistics as well as the pre-test of Augmented Dickey Fuller, Phillips-Peron and Kwiatkowski-Philips-Schmidt-Shin (KPSS). The study made use of agriculture output as dependent variable, government expenditure on agriculture, Commercial Bank Credit, Gross Capital formation, employment in agriculture, fertilizer consumption and annual average rainfall as independent variables. The results revealed that a 10 per cent increase in agricultural expenditure will cause agricultural output to increase by 5.46 per cent. Furthermore, a 10 per cent increase in commercial bank credit will cause agricultural output to increase by 2.43 per cent. The findings of the study revealed that government expenditure and commercial bank credit, both had a significant impact on agricultural output in Nigeria. Based on the results obtained, the study recommended that government expenditure on agriculture should be increased yearly and more allocation from the national budget to the agricultural sector. Also, policies that will help increase commercial bank credit that will assist farmers so as to increase their farm output should be put in place. (Word count: 294)