ASSESSING THE EFFECT OF GOVERNMENT AGRICULTURAL EXPENDITURE ON ECONOMICGROWTH IN NIGERIA
Abstract
Agriculture plays a vital role in Nigeria’s economy through employment generation, food security, and economic diversification. This study examines the effect of government agricultural expenditure on economic growth in Nigeria from 1981–2024, focusing on the impacts of capital and recurrent agricultural expenditures. The study adopts the Autoregressive Distributed Lag (ARDL) model to analyze both short-run and long-run relationships between real gross domestic product and selected variables. The ARDL bounds test confirms the existence of a long-run relationship among the variables. Findings reveal that capital expenditure on agriculture positively and significantly affect economic growth in the long run but has a negative short-run effect due to implementation delays and inefficiencies. Recurrent agricultural expenditure exerts a positive and significant effect in the long run, while its short-run impact is positive but insignificant. Labour and capital stock also contribute positively and significantly to economic growth in both periods. The study concludes that sustained and efficient agricultural spending is essential for long-term economic growth in Nigeria. It recommends improved transparency in public agricultural spending, strengthened institutional capacity, and policies that encourage private sector participation in the agricultural sector.
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