ABSTRACT
The study investigated the influence of Federal Government budget allocation to the agricultural sector on economic growth of Nigeria using time series data from 2000 to 2016. The time series data adopted in the study were generated from the Central Bank of Nigeria annual statistical bulletin, 2016. The ordinary least square of multiple regression was used for the analysis. The results showed that the influence of Federal Government budget allocation to the agricultural sector was positive and significant. Based on the findings, the study concluded that Federal Government budget allocation to the agricultural sector is crucial to economic growth of Nigeria. Hence, it was recommended among other things that Government needs to increase its allocation to the priority sectors, especially the agricultural sector of the economy so as to spur productive activities in the country.
TABLE
OF CONTENTS
Title Page i
Dedication ii
Acknowledgements iii
Declaration iv
Certification v
Table of Contents vi
List of Tables viii
Abstract ix
CHAPTER
ONE: INTRODUCTION
1.1
Background to the Study 1
1.2.
Statement of the Problem 4
1.3.
Objectives of the Study 5
1.4.
Research Questions 5
1.5.
Research Hypotheses 5
1.6.
Significance of the Study 6
1.7. Scope
of the Study 7
1.8 Limitation
of the Study 7
1.9 Definition
of Terms 7
CHAPTER
TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual
Framework 9
2.1.1. Concept
of Budget Allocation and Economic Growth 9
2.1.2 Government
Efforts on Agricultural Development in Nigeria 12
2.1.3 Importance of Budgetary
Allocations 14
2.1.4.
Importance of Agriculture Sector to
Economic growth of Nigeria 15
2.1.5. Budget Allocations and Implications on
Agricultural Development
in Nigeria 17
2.1.6. Types
of Budget 19
2.2. Theoretical
Framework 22
2.2.1.
Neoclassical Theory 22
2.2.2 Keynesian Theory 22
2.3 Empirical Review 25
CHAPTER THREE:
RESEARCH METHODOLOGY
3.1 Research
Design 34
3.2 Sources
of Data 34
3.3. Validity
and Reliability of Research Instrument 34
3.4. Model Specification 35
3.4.1. Description of Variables 36
3.5. Analytical
Techniques 36
CHAPTER FOUR: PRESENTATION
OF DATA, ANALYSIS AND DISCUSSION
4.1 Presentation
of Data 37
4.1.1 Trend
analysis 38
4.2 Analysis of the influence of Federal
Government budget allocation
to agricultural sector on economic
growth of Nigeria. 41
4.2.1 Regression
analysis 41
4.2.2 Test of hypotheses 42
4.2.3 Discussion of findings 43
CHAPTER
FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings 44
5.2 Conclusions 44
5.3. Recommendations 45
References
Appendix
LIST
OF TABLES
4.1:
Aggregate data used for the study 37
4.2:
Regression Analysis (dependent variable,
RGDP) 41
LIST
OF FIGURES
1:
Trend of RGDP 38
2: Trend of FGBAS 39
3: Trend of INFR 40
CHAPTER ONE
INTRODUCTION
1.1
Background
to the Study
The
history of federal government budget allocation in Nigeria can be traced to
1958 when colonial government appointed Jeremy Raisman and Professor Ronald
Tress to review the federal fiscal structure. The committee recommended that
the regions should have authority over produce sales tax and sales tax on motor
vehicle fuel. The committee also
recommended the establishment of a Distributable Pool Account (DPA) for the
purposes of sharing federally collectible revenues. The commission recommended
that the then practice of returning mining rents and royalties to the regions
should be discontinued (Omanukwue, 2015)
Olowononi
(2015) opined that budget allocation can be defined as allocation of tax powers
and the revenue sharing arrangements not only among the three levels of
government but among the federal government sectors as well. Under government's
distribution function, it allocates revenue to promote national unity and
equity (Jimoh, 2013). In Nigeria revenue allocation is taken as the
distribution of national revenue among the various tiers of government and
difference sectors of the economy in the federation in such away as to reflect
the structure of fiscal federalism
Nevertheless,
part of the effort by the government to sustain the country’s agriculture
sector is evidenced by its various revenue allocations to this sector in terms
of lending and budgetary provisions. Budgetary provisions are often made for
specific programmes or projects in agriculture, under numerous sub-sectors
mainly; crops, livestock, fisheries, and forestry (Central bank of Nigeria ,
2013).
Also,
a budget allocation to agricultural sector remains important in the history of
economic development in Nigeria. It generates employment for both skilled and
unskilled labour, and contributes enormously to national and state gross
domestic products. Agriculture helps to provide raw materials to the country’s
industrial sector and foreign agro allied industry, and enhances both national
and state food security. However, there has been a systematic neglect of the
sector at both national and state levels since the discovery of crude oil in
the country in the 1960s. Agriculture is the major source of livelihood in most
rural Nigerian society (Adekunle, 2015); hence, neglect of the agricultural sector
has opened the way for increased rural poverty, rural-urban migration, hunger
and crimes
Over
the years, government has almost been the sole provider of financial and other
capital resources to support agriculture. Government has attempted to increase her
expenditure on agriculture through budgetary allocation and through the
provision of cheap and readily available credit facilities (Nwosu 2017).
Nwosu
(2016) found that over the years, the government budgeting allocation has
become an important determinant of agricultural output in Nigeria. FAO (2017)
reported that in terms of budget allocation to agriculture in Nigeria, it was
an average of 4.74 percent from 1970-1980. But, from 1980-2000, it rose to 7.00
percent and 10 percent from 2001-2017, though revealing an increase, but still
falls short of Food and Agricultural organization (FAO) recommendation that 25
percent of government capital budget be assigned to the agricultural
development capital budget.
Akpokodjie
and Nwosu (2016) stressed that government allocation to agriculture is
relatively low and that actual expenditure falls short of budgeting expenditure
and the rate of under spending is usually higher for agriculture than for other
economic sectors. Economic growth is the
increase in the amount of the goods and services produced by an economy over
time. It is conventionally measured as the percent rate of increase in real
gross domestic product, or real GDP. Growth is usually calculated in real
terms, i.e. inflation-adjusted terms, in order to net out the effect of
inflation on the price of the goods and services produced. In economics,
economic growth or economic growth theory typically refers to growth of
potential output, i.e., production at full employment, which is caused by
growth in aggregate demand or observed output. Economic growth is generally
distinguished from development economics. The former is primarily the study of
how countries can advance their economies. Hence, the study will examine the
influence of federal government budget allocation to agricultural sector on
economic growth of Nigeria from 2000 to 2016.
1.2. Statement of the
Problem
One
sector that has a critical role to play in economic growth in Nigeria is the agricultural sector as over 40% of the gross domestic product
(GDP) comes from the sector and it employs about 60% of the working population
in Nigeria (Nwafor et al., 2012).
However, the agriculture sector has the highest poverty incidence and tackling
poverty entails tackling index of agricultural production in the country.
However, agricultural sector may have in recent years contributed significantly
to improved agricultural production in Nigeria, its actual contribution appears
to be much short of overall potential.
Federal
Ministry of Agriculture & Rural Development (FMA, 2015), pointed out that
one major problem of agriculture sector is that budget allocation to the sector
has fluctuated tremendously during the last two decades. Statistics
showed that over an 18 year period of 1980 – 1997, Nigeria spent only 1.45
percent of her annual agriculture GDP or about 0.1 percent of the total budget
on agricultural research. An average of 3.1 percent of the total budget was
spent on agriculture between 1999 -2001 (Federal Government budget, 1999;
2001). This was far below the recommended rate between 12% and 15%. (FAO,
2013).
Adefila
and Jenyo (2014) observed that the inadequacy of funds; the limited quantum
available of budget allocation to agricultural sector has at an adverse effect
of the economic growth of the country for the past few years. This is clear
when comparing the performance of agriculture sector to other sectors in the
economy of the country.
In
view of this scenario, the basic problem to tackle by this research is to
examine the influence of federal government budget allocation to agricultural
sector on economic growth of Nigeria from 2000 to 2016.
1.3. Objectives of the
Study
The
broad objective of this study is to examine the influence of federal government
budget allocation to agricultural sector on economic growth of Nigeria from
2000 to 2016. The specific objectives are;
1. To
determine the influence of federal government budget allocation to agricultural
sector on economic growth of Nigeria
2. To
ascertain the effect of inflation
rate on economic growth of Nigeria
1.4. Research Questions
1. To
what extent has federal government budget allocation to agricultural sector
affected economic growth of Nigeria?
2. How
far has inflation rate affected economic growth of Nigeria?
1.5. Research Hypotheses
The following hypotheses was stated in null form
H01:
Federal government budget allocation to agricultural sector has no significant
effect on economic growth of Nigeria.
H02:
Inflation rate has no significant effect on economic growth of Nigeria.
1.6. Significance of the
Study
The
study focuses on influence of federal government budget allocation to
agricultural sector on economic growth of Nigeria from 2000 to 2016. The study
was of immense benefit the following group;
Government:
The
findings and recommendations of the studyassistsgovernment in implementing
policies that will help in proper allocation of revenue to agricultural sector
of the economy
Policy makers:
Policy
makers utilize the result of the study in formulating policies that helped the
country in proper allocation of revenue to agricultural sector of the economy.
The
economic planner:
Economic planner utilizes the result of
the study in restoring the safety and soundness of the economy of Nigeria.
Far-reaching negative effects on the national economic well-being caused by
poor economic policies of the present administration, corruption,
misappropriation of money allocated to agricultural sector in the Nigeria was minimized by adopting the
recommendations of the study that will be made by the researcher.
Researchers and Students
Researchers
and students interested in a similar field of study in future finds this work
useful conceptual guide and reference material
1.7. Scope of the Study
The
study focuses on influence of federal government budget allocation to
agricultural sector on economic growth of Nigeria. The study covers from 2000
to 2016. The choice of this period by the researcher was based on the
availability of data under this period.
1.8.
Limitation
of the Study
The
major limitations of the research work was time constraint as the researcher
combines the research work with the other academic activities required for the
award of (B.SC), thus, there was little or no time left, especially with the
short duration of the semester.
Financial
problem in term of transportation cost of photocopying relevant materials,
departmental specification and accessories, general economic conditions with
regard to cost of material and other accessorily cost
1.9.
Definition of Terms
Agriculture
Agriculture
is defined as the cultivation of land for crop production and rearing of
animals for the use of man and also for the feed of animals (livestock).
Budget
Allocation
Budget allocation can be
described as a method of sharing the centrally generated revenue among different
tiers of government and how the amount allocated to a particular tier is shared
among its components for development
Economic growth
Economic
growth is define as the increase in the amount of the goods and services
produced by an economy over time
Government Revenue
Government revenue is money received by a government. It is an important tool of the fiscal policy of
the government and is
the opposite factor of government spending.
Sales Tax
A sales tax is
a consumption tax imposed
by the government on the sale of
goods and services
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment