The Effect of Government Agricultural Spending on Economic Growth

This study examined the effect of government agricultural spending on economic growth in Nigeria. The focus is on understanding the effect of agricultural and fertilizer spending on economic growth. The study further examined the influence of human capital on economic growth. The causality between agricultural spending and economic growth was also examined. This research is necessary to examine economic growth in Nigeria. This is more so as less than5% of government total spending is spent on the agricultural sector. Data covering the relevant variables over the period 1970 to 2013 were obtained from the annual reports and statistical bulletins of the National Bureau of Statistics, Central Bank of Nigeria, Food and Agriculture Organization, and the World Bank. The data were analyzed using descriptive statistics,co-integration, error correction estimation, and the Granger Causality test. The results revealed that government spending was stationary at first difference. The results also showed a long-run relationship between the growth rate of the economy and government spending in agriculture, education, fertilizer, health services, transport, and communication.