Impact of government expenditure on agricultural output and economic growth in Nigeria (1980 - 2016)

Abstract

This study empirically examined the impact of government expenditure on agricultural output and economic growth in Nigeria over the years. A time series data of 37 years sourced from the Central Bank of Nigeria was used. Ordinary Least Square (OLS) technique of data analysis was used in evaluating the secondary data. GDP was used as a proxy to economic growth, while agricultural output, government expenditure and interest rate were used as indicators. The objective of this study is to determine the relationship between government expenditure, agricultural output and economic growth in Nigeria and determine the exact relationship between agricultural output and economic growth. From the findings; agricultural output, interest rate and GDP are positively related. It was found that a significant relationship exists between agricultural output, interest rate and GDP in Nigeria. Also, it was found that an insignificant relationship exists between GDP and government expenditure because there is a negative relationship between them. The findings also revealed that the sector still encounter some problems like inadequate finance and poor infrastructure, amongst others. Therefore, the study recommends that it is imperative for the country to develop its agricultural sector through sufficient government spending to set-up its economic growth. It emphasizes the need to enlighten farmers, improve and provide infrastructures, accord a priority to the sector in budget allocation, enthrone adequate and appropriate extension services, among other measures laid by the government.