An analysis of federal government expenditure and monetary policy on agricultural output in Nigeria

摘要

The need to determine the factors that promote investment decisions in agriculture both on the part of the government and the citizenry in order to put the economy on the part of sustainable growth and development prompted this study. The broad objective of the study is to analyze the effectiveness of government annual budgetary allocation to agriculture and the role of monetary policy instruments in the growth of agricultural GDP. Data were sourced from the CBN statistical bulletin (various issues), and the National Bureau of Statistics. The data covers 1980-2012 and the method of analysis used is the OLS using E-view. The result of the analysis showed that Agricultural Credit Guarantee Scheme Fund, previous year GDPand Consumer Price Index contribute positively to the growth of agricultural GDP, other variables of interest like the interest rate, exchange rate, and government expenditure on agriculture contributed negatively to agricultural GDP growth. The study therefore recommended that government should increase her spending to agricultural sector, monitor the fund allocated, and provide the necessary infrastructural facilities like good road network, electricity health and water for the rural populace. The study concluded by recommending that the CBN should encourage the investor to invest in agriculture by bringing the interest rate down to single digit in order to facilitate investment in agriculture and promote consistent growth of agricultural GDP.