Agricultural Economics and Extension Project Topics

Government Expenditure and Agricultural Production in Nigeria 2010-2017

Government Expenditure and Agricultural Production in Nigeria 2010-2017

Government Expenditure and Agricultural Production in Nigeria 2010-2017

Chapter One

Purpose of the study

The objective of this study is to examine the impact of government expenditure on agricultural production. Specifically, we aim at:

  • Determining the relationship between government expenditure and agricultural output.
  • Ascertaining the impact of government expenditure on agricultural production.
  • Highlighting the challenges of Agricultural production.




One of the major challenges facing mankind is to provide an equitable standard of living, adequate food, clean water, safe shelter and energy, a healthy and secured environment, an educated public, and satisfying job for this and future generations. Of all these necessities, the first and most basic to human life and survival is enduring food security; which may be defined as a situation in which majority of the populace of a country have access to domestically produced food at affordable prices at all times (Akinboyo 2008). It is not an overstatement to assert that the growth and development of any nation depend, to a large extent, on the development of agriculture. The saying that “agriculture is the mainstay of the Nigerian economy may have become a cliché. It nevertheless underscores the emphasis placed on agriculture as the engine of growth in the Nigerian economy. Abayomi (1997) noted that stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of successful industrialization. Generally, the sector contributes to the development of an economy in four major ways-product contribution, factor contribution, market contribution and foreign exchange contribution (Kuznetz 1961; Mackie 1964; Abayomi 1997; Abdullahi 2002; World Bank 2007). In realization of this, the government has embarked on various policies and programmes aimed at strengthening the sector in order to continue performing its roles, as well as measures for combating poverty. Notwithstanding the enviable position of the oil sector in the Nigerian economy over the past three decades, the agricultural sector is arguably the most important sector of the economy. Agriculture’s contribution to the Gross Domestic product (GDP) has remained stable at between 30 and 42 percent, and employs 65 per cent, of the labour force in Nigeria (Emeka 2007). It is estimated to be the largest contributor to non- oil foreign exchange earnings. This means that agriculture holds abundant potential for enhancing and sustaining the country’s foreign exchange.




Research Design

The study adopts an ordinary least squares (OLS) of simple regression model in order to test the impact of agricultural expenditure on agricultural output in Nigeria between 2010 and 2017. Federal Government expenditure represents an independent variable (X), while agricultural output represents dependent variable (Y). The data is analyzed using E-View software package.

Test of statistical significance are conducted using the F-statistic test, t-test, unit root test and co-integration test. These tests are essential in testing the reliability of the parameter estimates.

Sources of Data

The data used for this study was purely secondary data. This kind of data cannot be manipulated as it has been refined from primary source. In this case, the data was sourced from the Central Bank of Nigeria (CBN) yearly bulletin.




This chapter is concerned with data presentation. The data collected from the central bank of Nigeria yearly bulletin will be analyzed using the E-view statistical tool. The answers from this analysis will help us reject or accept the hypotheses developed and formulated in the first chapter. Furthermore, from the result, we will be able to conclude the study and give possible recommendations.

Data Presentation

The table below presents data on agricultural sector expenditure (X) and output (Y) given in millions (naira). The table represents a sample of the Federal Government financing of the agricultural sector over the years, 2010- 2017.




It is important to reiterate that the objective of this study was to examine the impact of government expenditure and Agricultural Production in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in examining the impact of government expenditure and Agricultural Production in Nigeria.


This study was undertaken to examine the impact of government expenditure and Agricultural Production in Nigeria. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. The study reviewed related and relevant literatures. The chapter two gave the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting secondary data. The research method employed here is the Ordinary Lest Square method. The study analyzed and presented the data collected in tables and tested the hypotheses using the time series method. While the fifth chapter gives the study summary and conclusion.


The economic history of Nigeria is agro-based. Agricultural production provides employment opportunities and a source of income to about 80% of the country’s population. It is also a source of food security, raw materials to local industries and generates foreign exchange earnings for the country.

The findings of this paper revealed that there exists positive relationship between agricultural expenditure (financing) and its output, although a weak one, as shown in the regression analysis Table 2. As a sector that provides basic foundation to the Nigerian economy, increased improvement in agricultural production would not only enable Nigeria to feed its citizens but return to its former position as an exporter of agricultural products.


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