Government Expenditure as a Catalyst to Agricultural Growth in Nigeria (1985 -2018)
Chapter One
Research Objectives
The main objective of this study is to examine the impact of government expenditure on agricultural growth in Nigeria from 1985 to 2018. The specific objectives of the study include to:
- Determine the long run relationship between government expenditure on agricultural growth in Nigeria from 1985 to 2018.
- Investigate the trend and pattern between government expenditure on agricultural growth in Nigeria from 1985 to 2018.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
The motivation for endogenous growth model stems from the failure of the neoclassical theories to explain the sources of long-run economic growth. The neoclassical theory does not explain the intrinsic characteristics of economies that cause them to grow over extended period of time. The neoclassical theory focuses on the dynamic process through which capital-labour ratios approach longrun equilibrium. In the absence of external technological change, which is not clearly explained in the neoclassical model, all economies will converge to zero growth. The neoclassical theory see rising GDP as a temporary phenomenon resulting from technological change or a short-term equilibrating process in which an economy approaches its long run equilibrium. The neoclassical theory credits the bulk of economic growth to a completely independent process of technological progress. According to neoclassical theory, the low capital-labor ratios of developing countries promise exceptionally high rates of return on investment. Based on this premise, it was expected that the free market reforms imposed on highly indebted countries by the World Bank and the International Monetary Fund should have prompted higher investment, rising productivity, and improved standards of living. Yet even after the prescribed Liberalization of trade and domestic markets, many LDCs experienced little or no growth and failed to attract new foreign investment or to halt the flight of domestic capital. The anomalous behavior of developing world capital flows (from poor to rich nations) helped provide the impetus for the development of the concept of endogenous growth or, more simply, the new growth theory. The new growth theory represents a key component of the emerging development theory. The new growth theory provides a theoretical framework for analyzing endogenous growth, persistent GDP growth that is determined by the system governing the production process rather than by forces outside that system. In contrast to traditional neoclassical theory, these models hold GDP growth to be a natural consequence of long-run equilibrium. The principal motivations of the new growth theory are to explain both growth rate differentials across countries and a greater proportion of the growth observed. In particular, endogenous growth theorists seek to explain the factorsthat determine the rate of growth of GDP that is left unexplained and exogenously determined in the Solow neoclassical growth equation (that is, the Solow residual). Models of endogenous growth bear some structural resemblance to their neoclassical counterparts, but they differ considerably in their underlying assumptions and the conclusions drawn. The most significant theoretical differences stem from discarding the neoclassical assumption of diminishing marginal returns to capital investments, permitting increasing returns to scale in aggregate production, and frequently focusing on the role of externalities in determining the rate of return on capital investments. By assuming that public and private investments in human capital generate external economies and productivity improvements that offset the natural tendency for diminishing returns, endogenous growth theory seeks to explain the existence of increasing returns to scale and the divergent long-term growth patterns among countries. And whereas technology still plays an important role in these models, it is no longer necessary to explain long term growth. A useful way to contrast the new (endogenous) growth with traditional neoclassical theory is to recognize that many endogenous growth theories can be expressed by the simple equation Y = AK as in the Harrod-Domar model. In this formulation, A is intended to represent any factor that affects technology, and K again includes both physical and human capital. Agriculture is the art and science of crop and livestock production. In its broadest sense, agriculture comprises the entire range of technologies associated with the production of useful products from plants and animals, including soil cultivation, crop and livestock management, and the activities of processing and marketing.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine government expenditure as a catalyst to agricultural growth in Nigeria. Staffs CBN in Abuja form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain government expenditure as a catalyst to agricultural growth 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 addressing the challenges of government expenditure as a catalyst to agricultural growth in Nigeria
Summary
This study was on government expenditure as a catalyst to agricultural growth in Nigeria. Two objectives were raised which included: Determine the long run relationship between government expenditure on agricultural growth in Nigeria from 1985 to 2018 and investigate the trend and pattern between government expenditure on agricultural growth in Nigeria from 1985 to 2018. The study adopted a survey research design and conveniently enrolled 80 participants in the study. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from staffs of CBN in Abuja. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
This study concludes that government expenditure on agricultural sector and agricultural outputs have a positive and significant effect on economic growth in Nigeria. This conclusion is in line with the findings of Bhatia (2008) and a host of others who have carried out a related work.
Recommendation
It is recommended in the light of this study that, for any nation, to grow, especially in Nigeria, the focused of government expenditure on the agricultural sector should not be overlooked, thus, the government should direct its spending efforts in productive means, through increase, improve and encourage the output of the agricultural sector as previously shown.
References
- Abdullah,H.A (2000). The Relationship between Government Expenditure and Economic Growth in Saudi Arabia, Journal of Administrative Science, 12(2): 173-191
- Adenikinju, A.(2003) Nigeria’s imperative in the new world trade order, workshop report, African economic research consortium Nairobi, Kenya and trade policy research and training (TPRTP) Department of economics, University of Ibadan
- Alkali, R.A. (1997) the World Bank and Nigeria: cornucopias or pandora box? Kaduna: Baraka press, 10 -21
- Al-yousif Y, (2000). Does government expenditure inhibits or promote economic growth; some empirical evidence from Saudi Arabia, Indian economic journal
- Anyanwu. M.C. (2004) microfinance institutions in Nigeria: policy, practice and potentials, Paper presented at the G24 workshop on “Constraints to growth in sub Saharan Africa,’’ Pretoria, South Africa, November 29-30, 2004
- Barro .R. (1988). Economic growth in a cross section of countries. Quarterly Journals of Economics 106(2), 407-43 [7]
- Bernard O.A. (2009). The effect of Agricultural Government Expenditure, Government and Economic growth
- Bhatia, H.L. (2008). Public finance; 25th Edition, Vikas Publishing House, PVT Ltd ,Indian CBN (2004)’’ Changing the structure of the Nigerian Economy and implication for development ”Realm communication Ltd Lagos. Central Bank Annual Report and statement of account, 2005
- CBN Statistical bulletin, (2008). Annual Report and statement of account ‘’ PP 97-99