An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria

Yusuf Wasiu Akintunde; Adesope A. A. A.; V. O. Okoruwa

doi:doi:10.11648/j.ijefm.20130106.17

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An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria

Yusuf Wasiu Akintunde, Adesope A. A. A., V. O. Okoruwa

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)

Received: 8 October 2013 Published: 10 November 2013

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Abstract

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.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)
DOI	10.11648/j.ijefm.20130106.17
Page(s)	310-317
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Monetary Policy Instruments, Agricultural Credit Guarantee Scheme, E-view, Ordinary Least Square, Agricultural GDP

References

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[2]	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.
[3]	CBN (2008).Central Bank of Nigeria (CBN).Monetary Policy Department Series 1, 2008.CBN/MPD/Series/01/2008.
[4]	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.
[5]	Dickey, D.A. & Fuller, W.A. (1981). Likelihood ratio statistics for Autoregressive time series with a unit root" Econometrica 49(4):1057-72.
[6]	Engle, R.F. & Granger C.W.J. (1987). "Cointegration and Error correction: Representation, Estimation, and testing" Econometrica, Vol. 55(2):251-76.
[7]	FAOSTAT 2004. From(retrived 12 January,2011).
[8]	Fedderke J. (2001). Applied Time Series Analysis.University of the Witwatersrand, Econometric Research South Africa.
[9]	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.
[10]	FMARD.(Federal Ministry of Agriculture and Rural Development). 2001. New agricultural policy thrust. Abuja, Nigeria.
[11]	Friedman, M. (1969) (1)." The Role of Monetary Policy" The Optimum Quantity of Money. Ed. Milton Friedman.Chicago : Aldine.
[12]	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).
[13]	Johansen, S. (1992).Identifying Restrictions of Linear Equations.Institute of Mathematical Statistics, University of Copenhagen.
[14]	Mackie AB. (1964). The Role of Agriculture In Economic Growth and Development, Illinois Agricultural Economics, Agric. Journal, 43:45-56.
[15]	Nigeria, Federal Republic of. 1999. 1999 Constitution of the Federal Republic of Nigeria.
[16]	NPC (National Planning Commission). 2004. Meeting everyone’s needs-National Economic Empowerment and Development Strategy. Abuja, Nigeria.
[17]	Okhira, O. &Saliu, T.S. (2008), "Exchange Rate Variation and Inflation in Nigeria".
[18]	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.
[19]	World Bank 2008.World Development Report 2008.Agriculture for Development.United States of America, Monthly Report, 2: 7-9.
[20]	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.

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Yusuf Wasiu Akintunde, Adesope A. A. A., V. O. Okoruwa. (2013). An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. International Journal of Economics, Finance and Management Sciences, 1(6), 310-317. https://doi.org/10.11648/j.ijefm.20130106.17

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ACS Style

Yusuf Wasiu Akintunde; Adesope A. A. A.; V. O. Okoruwa. An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 310-317. doi: 10.11648/j.ijefm.20130106.17

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AMA Style

Yusuf Wasiu Akintunde, Adesope A. A. A., V. O. Okoruwa. An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. Int J Econ Finance Manag Sci. 2013;1(6):310-317. doi: 10.11648/j.ijefm.20130106.17

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@article{10.11648/j.ijefm.20130106.17,
  author = {Yusuf Wasiu Akintunde and Adesope A. A. A. and V. O. Okoruwa},
  title = {An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {310-317},
  doi = {10.11648/j.ijefm.20130106.17},
  url = {https://doi.org/10.11648/j.ijefm.20130106.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.17},
  abstract = {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.},
 year = {2013}
}

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TY - JOUR
T1 - An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria
AU - Yusuf Wasiu Akintunde
AU - Adesope A. A. A.
AU - V. O. Okoruwa
Y1 - 2013/11/10
PY - 2013
N1 - https://doi.org/10.11648/j.ijefm.20130106.17
DO - 10.11648/j.ijefm.20130106.17
T2 - International Journal of Economics, Finance and Management Sciences
JF - International Journal of Economics, Finance and Management Sciences
JO - International Journal of Economics, Finance and Management Sciences
SP - 310
EP - 317
PB - Science Publishing Group
SN - 2326-9561
UR - https://doi.org/10.11648/j.ijefm.20130106.17
AB - 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.
VL - 1
IS - 6
ER -

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Author Information

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

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APA Style

Yusuf Wasiu Akintunde, Adesope A. A. A., V. O. Okoruwa. (2013). An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. International Journal of Economics, Finance and Management Sciences, 1(6), 310-317. https://doi.org/10.11648/j.ijefm.20130106.17

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ACS Style

Yusuf Wasiu Akintunde; Adesope A. A. A.; V. O. Okoruwa. An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 310-317. doi: 10.11648/j.ijefm.20130106.17

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AMA Style

Yusuf Wasiu Akintunde, Adesope A. A. A., V. O. Okoruwa. An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria. Int J Econ Finance Manag Sci. 2013;1(6):310-317. doi: 10.11648/j.ijefm.20130106.17

Copy | Download

@article{10.11648/j.ijefm.20130106.17,
  author = {Yusuf Wasiu Akintunde and Adesope A. A. A. and V. O. Okoruwa},
  title = {An Analysis of Federal Government Expenditure and Monetary Policy on Agricultural Output in Nigeria},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {310-317},
  doi = {10.11648/j.ijefm.20130106.17},
  url = {https://doi.org/10.11648/j.ijefm.20130106.17},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.17},
  abstract = {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.},
 year = {2013}
}

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