An analysis of public spending on crop subsector output in Nigeria from 1980 to 2017: implications for poverty reduction

Abstract

This study looked at the impact of government spending on crop subsector output and the implications for poverty reduction in Nigeria.  Annual time-series data from 1980 to 2017 were obtained from secondary sources and analyzed using trend, growth, and ARDL models, as well as the Bounds test. Both long and short-run effects were investigated.  The trend results show that the variables used in the analysis, such as public spending, crop subsector output, agricultural labor, agricultural land, and the inflation rate, fluctuated over the period. Furthermore, the growth model results show that public spending (0.0024), crop subsector output (0.0039), and agricultural labor (9.34E-05) increased during the study period. Agricultural land (-0.0005) and inflation (-0.00012) rates, on the other hand, decelerated during the study period.  The Bounds tests reveal a long-run relationship between agricultural spending and crop subsector output, with an F-value of 14.511, which is greater than the upper bound critical value of 3.79 at a 5% level of probability. . Furthermore, the ARDL model results show that public agricultural spending has a significant effect on crop output (0.649) at 5% probability levels, implying that a unit increase in public agricultural spending increases crop output by 0.649 % in the short run. Furthermore, the results show that in the long run, public spending has a significant effect on crop output (0.268), implying that a unit increase in public spending increases crop subsector output. The findings also show that crop subsector output has a significant (-0.067890) effect on poverty in the short run but not in the long run.  According to the study, public spending has a significant impact on crop subsector output in Nigeria. According to the study, the government should implement the Maputo Agreement of allocating 10% of budgetary allocation to the crop sector, which will undoubtedly increase crop subsector output and potentially reduce poverty in Nigeria. It is also suggested that participants in the crop sector receive training as a form of capacity building, as well as soft low-interest loans, in order to encourage entrepreneurship and reap the benefits of government spending on agriculture.