Impact Ofgovernmentexpenditure On Agricultural Output In Nigeria

Authors: Usman Gana Ph.D; Adeniji, Sesan Oluseyi Ph.D; Odugbemi Taiwo Hassan
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This study empirically examined the impact of government expenditure on agricultural output in Nigeria using time series data covering the period of 1990 to 2016. The study employed Augmented Dickey–Fuller (ADF) unit root test, Johansen cointegration test and Vector Error Correction model (VECM) as the estimation techniques. We examined the impact of government expenditure on agriculture, interest rate on agriculture credit, deposit bank loans to agriculture and agricultural credit guarantee scheme fund on agricultural output. The results revealed that there is long run relationship among the variables as shown by the result of the Johansen cointegration test. Also, the VECM result showed that the speed of adjustment of the variables towards their long-run equilibrium path was low, estimated as 22.7953% and deposit bank loans to agriculture as well as agricultural credit guarantee scheme showed a positive and significant impact of agricultural output. Based on the empirical that, adequate information systemshould be provided by government in order to sensitize the farmers on the various forms of credits available to them and ensure effective policies that will curb the diversion of credits meant for agricultural development.