An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria
International Journal of Economics, Finance and Management Sciences
Volume 1, Issue 6, December 2013, Pages: 310-317
Received: Oct. 8, 2013;
Published: Nov. 10, 2013
Views 3573 Downloads 365
Yusuf Wasiu Akintunde, Department of Agricultural Economics, University of Ibadan, Oyo State, Nigeria
Adesope A. A. A., Federal College of Forestry, Jericho, Ibadan Oyo State Nigeria
V. O. Okoruwa, Department of Agricultural Economics, University of Ibadan, Oyo State, Nigeria
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.
Yusuf Wasiu Akintunde,
Adesope A. A. A.,
V. O. Okoruwa,
An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria, International Journal of Economics, Finance and Management Sciences.
Vol. 1, No. 6,
2013, pp. 310-317.
Abayomi, O.(1997), The Agricultural Sector in Nigeria: The way forward. CBN Bullion, 21: 14-25.
Bakucs LZ &Ferto I. (2005). Monetary Impact and Overshooting of Agricultural Prices in an Open Economy. Paper prepared for the XIth International Congress of the European Association of Agricultural Economists (EAAE,) Copenhagen, Denmark, August 24-27, 2005.
CBN (2008).Central Bank of Nigeria (CBN).Monetary Policy Department Series 1, 2008.CBN/MPD/Series/01/2008.
Chimobi, O.P. &Uche, U.C. (2010), "Money, Price and Output: A Causality Test for Nigeria, American Journal of Scientific Research, ISSN 1450-223X Issue 8(2010). Pp. 78-87.
Dickey, D.A. & Fuller, W.A. (1981). Likelihood ratio statistics for Autoregressive time series with a unit root" Econometrica 49(4):1057-72.
Engle, R.F. & Granger C.W.J. (1987). "Cointegration and Error correction: Representation, Estimation, and testing" Econometrica, Vol. 55(2):251-76.
FAOSTAT 2004. From(retrived 12 January,2011).
Fedderke J. (2001). Applied Time Series Analysis.University of the Witwatersrand, Econometric Research South Africa.
Folawewo, A.O. &Osinubi, T.S. (2006), "Monetary Policy and Macroeconomic Instability in Nigeria: A Rational Expectation Approach", Journal of Social Science, 12(2): 93-100.
FMARD.(Federal Ministry of Agriculture and Rural Development). 2001. New agricultural policy thrust. Abuja, Nigeria.
Friedman, M. (1969) (1)." The Role of Monetary Policy" The Optimum Quantity of Money. Ed. Milton Friedman.Chicago : Aldine.
Iganiga, B.O. &Unemhilin, D.O. (2011) "The Impact of Federal Government Agricultural Expenditure on Agricultural Output in Nigeria. J Economics, 2(2):81-88 (2011).
Johansen, S. (1992).Identifying Restrictions of Linear Equations.Institute of Mathematical Statistics, University of Copenhagen.
Mackie AB. (1964). The Role of Agriculture In Economic Growth and Development, Illinois Agricultural Economics, Agric. Journal, 43:45-56.
Nigeria, Federal Republic of. 1999. 1999 Constitution of the Federal Republic of Nigeria.
NPC (National Planning Commission). 2004. Meeting everyone’s needs-National Economic Empowerment and Development Strategy. Abuja, Nigeria.
Okhira, O. &Saliu, T.S. (2008), "Exchange Rate Variation and Inflation in Nigeria".
Saghaian SH, Reed MR & Merchant MA (2002). Monetary Impacts and Overshooting of Agricultural Prices In an Open Economy. American Journal of Agricultural Economics, Vol 84: 91-103.
World Bank 2008.World Development Report 2008.Agriculture for Development.United States of America, Monthly Report, 2: 7-9.
Yusuf, S.A. & Yusuf, W.A. (2007) "Determinants of Selected Agricultural Export Crops in Nigeria: An ECM Approach" (AAAE) Conference Proceedings 469-472 AAAE 2007.