PUBLIC SECTOR EXPENDITURE AND AGRICULTURAL PRODUCTIVITY IN NIGERIA

Abstract

The agricultural sector has been known to be the backbone of the Nigerian economy ever since the discovery of crude oil in commercial quantity. The sector’s contribution to Gross Domestic Product is 24 percent, 70 percent to total employment and 12 percent from foreign exchange earnings. The Federal Government of Nigeria changes the direction of its expenditure from agriculture to crude oil over time, relegating agriculture to the background. As a result of the challenge of the neglect of agriculture, the researcher must investigate public sector expenditure on agriculture and its effect on agricultural productivity in Nigeria. The study adopts Augmented Dickey-Fuller (ADF) and autoregressive distributed lag (ARDL) for the test estimation for short-run and long-run relationships between the dependent and independent variables, using time series data obtained from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), Federal Ministry of Agriculture and Rural Development (FMARD) and United Nations Conference on Trade and Development (UNCTAD). The findings of the study reveal that ACEXD has a positive and significant co-efficient impact of 0.003966 on AGPO in Nigeria for the long-run relationship. AREXD has a negative and significant co-efficient impact of 0.003805 on AGPO in Nigeria for the long-run relationship. The result of ATEXD shows a positive and significant co-efficient impact of 0.948588 on AGPO. AVAPW has a negative but insignificant co-efficient impact of 0.002075 on AGPO. INTR has a positive but insignificant co-efficient impact of 0.002546 on AGPO. EXVAL has a negative and significant co-efficient impact of 0.008628 on AGPO. CRAGR to DMBs has a positive but insignificant co-efficient impact of 0.001758 on AGPO. EFFRA of public sector expenditure has a positive and significant co-efficient impact of 0.959348 on AGPO in Nigeria. The study, therefore, recommends that the government and other stakeholders in agriculture invest more in technology and innovation in agriculture and increase budget allocation to agriculture in line with the stipulation of the Comprehensive African Agricultural Development Programme (CAADP) and Food and Agricultural Organization (FAO), Government to have engagement with agricultural stakeholders, government to review agricultural policies and programmes, and government to invest in human capital in agriculture.