Connection between Government Agricultural Spending and Agricultural Sector Growth in Nigeria: An Autoreegressive Distributed Lag (ARDL) Approach

This study empirically evaluates the connection between government expenditure and agricultural growth in Nigeria from 1986 to 2024. The chosen secondary time series data were extracted from the Central Bank of Nigeria (CBN) and the World Bank Development Indicators (WDI) Database, 2024 editions. Agricultural value added (measure of agricultural sector annual contribution to GDP) (the dependent variable) was regressed as a function of aggregate government expenditure on agriculture, total number of manpower employed in the agricultural sector, gross fixed capital formation, carbon emission, federal government annual spending on internal security and aggregate public debt stock. The study adopted Augmented Dickey-Fuller Structural Breakpoint test to check for maximum order of integration of the variables used, and all the variables showed a mixed order of integration. ARDL Bounds test cointegration analysis shows evidence of long run relationship among the variables. Findings reveal that aggregate government expenditure on agriculture (GEXPA) was positive, although statistically insignificant in determining the agricultural sector contribution to GDP in the short run and long run in Nigeria. The Granger causality result shows that there is a strong and significant one-directional causality relationship running from gross fixed capital formation to agricultural value added (that is, GFCF→AGVA) between gross fixed capital formation and agricultural value added over the period under consideration. The study recommends, among others, that it is expedient to the concerned actors in the accounting and allocation of agricultural funds—especially the Ministry of Finance, Budget and National Planning, Ministry of Agriculture, etc., to be fair and just in expending the resources (funds) mapped for the welfare of the citizens through the various agricultural programmes; so as to achieve the desired SDGs goal or response in the country.