Nexus Between Federal Government Spending on Agriculture, Agricultural Output Response and Economic Growth of Nigeria (1979-2013)

This study examined the nexus between federal government’s expenditure on agricultural sector, agricultural output and economic growth of Nigeria. The objectives are: to describe the trend of expenditure on agricultural sector over the years, determine the relationship between government expenditure and economic growth, determine the relationship between government expenditure and agricultural output and offer recommendations based on the research findings on the possible ways of improving agricultural sector performance in the economy. Secondary source of data was obtained from the Central Bank of Nigeria (CBN) statistical bulletin, 2014 edition to analyze the stated objectives. The time series data covered 35 years, ranging from 1979-2013. The results revealed that there is a fluctuating trend in government expenditure in agriculture over the years under review. The regression results show about 16% of total variation in the dependent variable (Real GDP) has been explained by the explanatory variable (government expenditure) while about 21% of total variation in the dependent variable (Agricultural output) has been explained by the explanatory variable (government expenditure). Results also revealed a negative relationship between the public sector spending on agriculture agricultural output and economic growth. The results concluded that federal government spending on agricultural sector has significant impact on economic growth as well as agricultural output response in Nigeria. The study therefore recommends that conscious effort should be made by government at all levels towards increasing budgetary allocation to the agricultural sector.