Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

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

Ogunjinmi Olusola O.

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 financingagricultural outputinvestmentinflationinterest.

References

Abbas, A.C., Jiang, Y.,Rehman, A.,Jingdong L.& Dean, D. (2016). Impact of Government Expenditure on Agricultural Sector and Economic Growth in Pakistan. American- Eurasian Journal of Agricultural & Environmental Sciences, 16(8): 1441-1448. Aina, G.O &Omojola, J.T (2017). Assessment of the Effect of Government Expenditure on Agricultural Output in Nigeria. International Journal of Innovative Agriculture & Biology Research, 5(4): 1-7. Akanbi, O.O., Onuk, E.G & Umar, H.S. (2019). Effect of Agricultural Sector Expenditure on Nigeria?s Economic Growth. Asian Journal of Agricultural Extension, Economics & Sociology, 32(3): 1—11. Akinboyo, O. L. (2008). Five decades of Agricultural Policies. What Role has Statistics Played? CBN Bulletin, 22: 134-165. Akinwale, O. &Ayodele, A.P (2019). Effect of Government Expenditure Components on Agricultural Productivity in Nigeria. Journal of Economics and Sustainable Development, 10(18): 1-13. Alimi, O. Y. (2017). Globalization and Non-oil Export Performance in Nigeria: A Bound Co- integration Approach. Euro Economica, 36 (2), 44-54. Anoke, C. I., Odo S.I, Chukwu, B. C. &Agbi, P. E. (2016). Testing the Applicability of Wagner?s Law in Nigeria. Journal of Research in Business and Management, 4(6): 33-45. Anyanwu, J. C. (1997). The structure of the Nigerian Economy (1960-1997). Onitsha Joanee. Asaleye, A.J., Alege, P.O., Lawal, A.I., Popoola, O. &Ogundipe, A.A (2020). Cash Crops Financing, Agricultural Performance and Sustainability: Evidence from Nigeria. African Journal of Economics and Management Studies, 3: 1-23. Asaleye, A.J., Lawal, A.I., Popoola, O., Alege, P.O. &Oyetade, O.O. (2019). Financial Integration, Employment and Wages Nexus: Evidence from Nigeria. Montenegrin Journal of Economics, 15(1): 141-154. Central Bank of Nigeria (2010) Statistical Bulletin (various issues), Abuja. Central Bank of Nigeria (2015) Statistical Bulletin (various issues), Abuja. Dickey, D and Fuller, W. (1979). Discussion of the Estimators for an Autoregressive Time Series with a Unit Root. Journal of American Statistical Association, 74, 427-431. Eleojo, A. M &Eyo, E. O (2019). Impact of Financial Sector Reforms on Agricultural Output in Nigeria. Saudi Journal of Humanities and Social Sciences, 4(8): 530-535. Enrique, B.A., Camilo, G.O. Blanca, M. D. & Dwi, E. A. (2012). Agriculture Public Spending and Growth in Indonesia. Policy Research Working Paper No. 5977, The World Bank, Poverty Reduction and Economic Management Unit, East Asia Region FMARD (2008), Annual Report 2008, Federal Ministry of Agriculture and Rural Development, Abuja, Nigeria Gollin, D., Lagakos, D. & Waugh, M.E. (2014). Agricultural Productivity Differences across Countries, The American Economic Review: Papers and Proceedings, 104(5): 165- 170. Hammond, R. (2003). The Impact of IMF Structural Adjustment Policies on Tanzanian Agriculture. http/www.developmentgap.org/imftanzania.html. Henrekson, M. (1993) Wagner?s Law - A Spurious Relationship? Public Finance/Finances Publiques, 48(2): 406-415. Ibok, O. W. &Bassey, N. E. (2014). Wagner?s law revisited: The case of Nigerian agricultural sector. International Journal of Food and Agricultural Economics, 2(3): 19-32. Iganiga, B.O &Unemhilin, D.O. (2011). The Impact of Federal Government Agricultural Expenditure on Agricultural Output in Nigeria. Journal of Economics, 2(2): 81-88. Ijaiya, M. A & Ijaiya, G. T. (2003). The Impact of Agricultural Finance on Agricultural Output in Nigeria. Poverty, Globalization and Human. Journal of Economics, International Finance and Development. Jugae, V.B (ed). www.unilorin. edu.ng/ index. php/ijaiyama. Keji, S.A., Efuntade, O.O (2020). Agricultural Output and Government Expenditure in Nigeria. JournalPerspekifPembiayaandan Pembangunan Daerah, 8(2): 101-110. Lagakos, D. & Waugh, M.E. (2013). Selection, Agriculture and Cross-country Productivity Differences, The American Economic Review, 103(2): 948-980. Mesagan, E. P., Ogbuji, I. A., Alimi, O. Y., Odeleye, A. T. (2020). Growth Effects of Financial Market Instruments: The Ghanaian Experience. Forum Scientiae Economia, 7(4), 67-82. NBS (2016). National Bureau of Statistics: Nigerian Gross Domestic Product Report. Oji-Okoro I. (2011). Analysis of the contribution of Agricultural Sector on the Nigerian Economic Development, World Review of Business Research, 1(1): 191-200. Okoh, A. S. (2015). Impact of Fiscal Policy on the Growth of Agricultural Sector in Nigeria. European Journal of Educational and Development Psychology, 3(4): 1-17. Onakoya, A.B., Khostly, B. A. & Johnson, B.S. (2018). Value Added Agricultural Output and Macroeconomic Dynamics in the Nigerian Economy. Kampala International University Journal of Humanities, 3(4): 79-91. Pesaran, M. H., and Pesaran, B. (1997). Microfit 4.0: Interactive Econometric Analysis, Oxford University Press. Pesaran, M. H., and Shin, Y. (1999). “An Autoregressive Distributed Lag Modelling Approach to Co-integration analysis”. A revised version of a paper presented at the symposium at the Centennial of Ragnar Frisch, the Norwegian Academy of Science and Letters, Oslo, March3-5, 1995. Pesaran, M., Shin, Y. & Smith, R. (2001), Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16(3): 289-326. Shuaib, I.M., Igbinosun, F.E., Ahmed, A.E (2015) Impact of Government Agricultural Expenditure on the Growth of the Nigerian Economy. Asian Journal of Agricultural Extension, Economics & Sociology, 6(1): 23-33. Talknice, S., Mufaro, A. (2014). Agricultural Expenditure and Economic Performance in Zimbabwe. International Journal of Economic Research, 5(5): 50-59. Victor, N., Okoro, E. U. Bello, K., Alozie, C. P. (2019). Agricultural financing and its impact on agricultural GDP: An ARDL. International Journal of Sustainable Agricultural Research, 6(1): 47-60 . Wagner, A. (1893). Three Extracts on Public Finance, in Musgrave R.A. and Peacock A.T. (eds) (1958), Classics in the theory of public finance. London: Macmillan. Yesufu T. M. (1996). The Nigerian Economy Growth without Development. Benin: Benin Social Sciences Series for Africa.

More Articles from IIARD INTERNATIONAL JOURNAL OF ECONOMICS AND BUSINESS MANAGEMENT