Agricultural output and government expenditure in Nigeria

Abstract

The study empirically investigate the link between agricultural output growth and government spending in Nigeria from 1981 to 2018. Augmented Dickey-Fuller (ADF) test was used to investigate stationary variable at different levels. The mixture in order of integration necessitate Auto Redistributed Lag (ARDL) and Bounds co-integration, since it allows combination of fractionally integrated variables. The results show both short and long run effect of government spending on the growth of agricultural output in Nigeria. The policy implication is that any disruption in government spending on agricultural sector would have adverse effect on agricultural output growth in Nigeria. In view of poor agricultural output growth in Nigeria, coupled with corruption, and policy summersaults in the sector. It is pertinent in the study, to come up with the following recommendations thus; government should re-double it efforts in terms food security through improved agricultural policies, proper channelization of loans across board with sustainable fiscal measures that can translate to actual growth.

Asymmetric Effects of Economic Policy Uncertainty on Food Security in Nigeria

“…This inconsistency could potentially contribute to food insecurity. This is in line with Keji and Efuntade (2020), who found that disruption in government spending in the agricultural sector would have an adverse effect on agricultural output growth. If exchange rates are highly uncertain, it can affect the cost of imported goods, including food (Oluyemi and Essi 2017).…”

Public expenditure on infrastructural development and economic growth: Evidence from Nigeria

“…According to Solow & Swan (1956), as cited in the works of Wells (2015) and Keji & Efuntade (2020), long-run aggregate economic growth can be achieved through technological progress, which revolves around social infrastructural growth. The neoclassical posited that improvement in technology is capable of prompting productivity function upward, which brings about overall growth in an economy.…”

“…Abu & Abdullahi (2010) argued from other fiscal perspectives and submitted that any increase in inflation and general spending results in slow economic growth. Conversely, Keji & Efuntade (2020) argued that a general increase in output level, specifically in a steady form over a specific period, brings about the desired economic growth in Nigeria. Since economic growth is classified as the level of increase in the nation's per capita output, aided by a continuous rise in an infrastructural set-up that predates the overall consumption, trade volume, labor force, and capital (Jhingan, 2003), it is surprising that, despite the yearly budgetary provision for government spending on infrastructural development in Nigeria, the infrastructure remains a deficit, making it difficult to achieve the required economic growth in Nigeria.…”

“…Keynes opines public expenditures are an exogenous factor and could be used as an instrument to spur growth (Keji & Efuntade, 2020). From the Keynesian point of view, public expenditure has a positive link with economic growth through the advancement of technology.…”

“…Wells (2015) further argues that technological progression improves general economic growth because other factors (such as labor & capital) adjust according to technological advancement. Hence, government spending is necessary for economic growth in Nigeria (Keji & Efuntade, 2020). Babatunde (2018) argues that government expenditure has diverse effects on the economic growth in Nigeria.…”