ISSN – PRINT:2756-4495 | ONLINE: 2756-4487

Volume 05, Issue 01 – 2025

Government Expenditure on the Agricultural Sector and Poverty Reduction in Nigeria

Alexander Amuche

ABSTRACT

This study examined government expenditure on agricultural sector and poverty reduction in Nigeria from 1980-2022. The data for the study were sourced from the Statistical bulletin of Nigeria’s apex bank and World Bank – World Development Indicator. The Autoregressive Distributed Lag (ARDL) model was employed as the main analytical tool. The results of the analyses revealed the presence of a long run association amongst the variables. The results also showed that in the long run, both government capital and recurrent expenditure on agriculture have positive and insignificant relationship with poverty incidence in Nigeria during the period of study. At the same time, deposit money banks’ credits to agricultural sector and monetary policy rate have negative and insignificant relationship with poverty incidence in the long run. In the short run, government recurrent expenditure on agriculture has a negative and significant relationship with poverty incidence in Nigeria. However, government capital expenditure on agriculture, deposit money banks’ credits to agricultural sector and monetary policy rate have positive and significant relationship with poverty incidence. Based on the findings, the study therefore recommended amongst others that government should increase her budgetary allocation to the agricultural sector in a consistent manner. This is because of its importance to the national economy. Particularly, government budgetary allocation to the agricultural sector should be more on the sector’s driving infrastructural facilities such as good access road networks, irrigation facilities, storage systems, modern farming machines, supply of steady electricity in the rural large farming communities, etc. The provision of these capital goods will no doubt impact positively on the rural farmers’ productivity and aggregate agricultural output growth of the economy which in turn will help to reduce poverty in Nigeria.

 

Keywords: Government Expenditure, Capital Expenditure, Recurrent Expenditure, Agriculture, Poverty, ARDL and Nigeria.

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