GOVERNMENT EXPENDITURE ON AGRICULTURE AND POVERTY REDUCTION IN NIGERIA (1986-2023)
Gozuk, Augustine Emmanuel, Likita, J Ogba, PhD and Mathais A. Eneji, PhD
Volume 4 Issue 2
Abstract
The study investigates the relationship between government agricultural expenditure and poverty reduction in Nigeria spanning 1986 to 2023.Expost facto design approach was used as a guide, while annual time series data were sourced from the Central Bank of Nigeria, National Bureau of Statistics (NBS) and World Development Indicators (WDI). Agricultural expenditure was disaggregated in to government expenditure on crop (GEC), government expenditure on fishery and aquatic life (GEF), government expenditure on livestock (GEL) and government expenditure on agriculture (GAE), while poverty reduction was measured using Average Poverty Rate (APR). The Autoregressive Distributive Lag (ARDL) regression was employed in the estimation. The shortrun results showed that government expenditure on agriculture, fishery and aquatic life and livestock production had significant positive effect on poverty reduction (p<0.050). The ARDL-ECM coefficient of -0763455 indicates a 76.35 percent annual speed of adjustment back to equilibrium when there is a shock. The long-run results showed that government expenditure on crop production and government total agricultural expenditure had insignificant positive effect on poverty reduction, while government expenditure on fishery and aquatic life production had a significant negative effect on poverty reduction in Nigeria. It was found that government expenditure on livestock production had a significant positive effect on poverty reduction in Nigeria. The Adjusted R square coefficient shows that 73.69 percent of the changes in poverty reduction were largely attributed to changes in the explanatory variables of government expenditure on disaggregated agricultural sub-sectors. The study concluded that government expenditure on agriculture has effect on poverty reduction in Nigeria. The study recommends among others that Government should increase its budgetary allocation to the crop sub-sector to enable farmers have access to farming inputs for higher crop production, government should enact and implement water resources related policies that can help in boosting fishery and aquatic life production, credit facilities for livestock farming under the supervision of the Central Bank of Nigeria so as to increase livestock production and the Food and Agricultural Organization (FAO) agricultural minimum financing benchmark and open up rural communities in order to raise boots productivity and reduce poverty in Nigeria. Keywords: Government Expenditure, Agriculture, Government Expenditure on Agriculture, Poverty Reduction
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