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Public sector expenditure in agriculture and economic growth in Nigeria: An empirical investigation

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  • Akeem A. Tijani
  • Olumemino Oluwasola
  • Olayinka I. Baruwa

Abstract

Available literature has shown that the impact of total government expenditure as well as government expenditure by type of economic growth is mixed. This study extends this literature by examining the impact of government expenditure on agriculture, on Nigeria's economy from 1970 to 2006. General-to-specific methodology of time series econometrics was utilised to arrive at the preferred error correction model that was used to determine the impact of government spending on agriculture and on economic growth. In consonance with economic theory, the results showed that the total expenditure on agriculture had a positive significant effect on Nigeria's economic growth in the long run with elasticity of 0.32 during the period under review. The results also showed that economic growth was independent of recurrent expenditure, but dependent (positively) on capital expenditure in the long run with elasticity of 0.36. The implication is that agriculture should be given priority in budgetary allocation and capital spending to promote economic growth in Nigeria.

Suggested Citation

  • Akeem A. Tijani & Olumemino Oluwasola & Olayinka I. Baruwa, 2015. "Public sector expenditure in agriculture and economic growth in Nigeria: An empirical investigation," Agrekon, Taylor & Francis Journals, vol. 54(2), pages 76-92, June.
    • Handle: RePEc:taf:ragrxx:v:54:y:2015:i:2:p:76-92
    DOI: 10.1080/03031853.2015.1073000
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    References listed on IDEAS

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    1. Afonso, António & Furceri, Davide, 2010. "Government size, composition, volatility and economic growth," European Journal of Political Economy, Elsevier, vol. 26(4), pages 517-532, December.
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    2. Gbolahan Olowu & Godwin Olasehinde-Williams & Murad Bein, 2019. "Does financial and agriculture sector development reduce unemployment rates? Evidence from Southern African countries," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(5), pages 223-231.
    3. Ogunlesi, Ayodeji, 2018. "Agricultural Productivity, Fiscal and Trade Policies Nexus in Sub-Saharan Africa: A Panel Structural Vector Error Correction Model Analysis," MPRA Paper 90202, University Library of Munich, Germany.
    4. Khairul Amri & Raja Masbar & B. S. Nazamuddin & Hasdi Aimon, 2024. "Does Unemployment Moderate the Effect of Government Expenditure on Poverty? A Cross-Provinces Data Evidence from Indonesia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 92-113.
    5. Olawumi Abeni Osundina & Festus Victor Bekun & Dervis Kirikkaleli & Mary Oluwatoyin Agboola, 2019. "Does the twin growth catalyst of oil rent seeking and agriculture exhibit complementary or substitute role? New perspective from a West African country," Letters in Spatial and Resource Sciences, Springer, vol. 12(3), pages 187-197, December.
    6. Hui Zhang & Yuyao Qian & Liying Yu & Zheng Wang, 2020. "Integrated Development of Information Technology and the Real Economy in China Based on Provincial Panel Data," Sustainability, MDPI, vol. 12(17), pages 1-17, August.
    7. Megbowon Ebenezer* & Saul Ngarava & Nsikak-Abasi Etim & Oluwabunmi Popoola, 2019. "Impact of Government Expenditure on Agricultural Productivity in South Africa," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(12), pages 1734-1742, 12-2019.

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