IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 7 NO. 2 2021

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Assessing the Agricultural Growth Potentials of Nigeria: What Role has Agriculture Public Finance Played?

Ogunjinmi Olusola O.

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Abstract

This study investigates the role of agriculture public financing in agricultural output growth in Nigeria for the periods of 1981 to 2019. The study utilizes the autoregressive distributed lag (ARDL) to estimate the parameters and Granger causality to establish the causal links between government agriculture expenditure and agricultural output growth. The ARDL bounds test reveals that there is a long run relationship between government agriculture expenditure and agricultural output growth in Nigeria. The study found that government agriculture expenditure contributes negatively and significantly to the Nigerian agricultural output growth in the short run, while contributing positively and significantly to long run agricultural output growth. This empirical short run evidence can be attributed to the loopholes in government agricultural financing. Meanwhile, public agriculture financing has tendency of enhancing agriculture output growth in the long run. Thus, there is need for the government to set up independent monitoring authorities that will ensure budgeted funds reach the target beneficiaries especially in the agricultural sector. Also, they should put in place stringent measures that will deter unsolicited diversion or misappropriation of such funds for personal aggrandizement. The causality test result showed that there is a one-way causality from public agriculture expenditure to agriculture output growth in Nigeria

keywords:

Government financing, agricultural output, investment, inflation, interest.

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