ABSTRACT

Most industrialized countries over the years have passed through the agrarian era. In fact, the industrial sector takes its roots from the agricultural sector. In a developing nation, government fiscal responsibility is very central to all facets of development including agriculture. The study thus seeks to examine the impact of government Budget deficit on the growth of agricultural sector in Nigeria between 1981 and 2018, the OLS estimation method was employed, and also, the Error Correction Model (ECM) was used. Unit root tests were conducted on each of the variables to avoid spurious regression results. Stationary variables were subsequently used for the analysis. The findings from the study revealed that Government Budget Deficit (BD) has a positive and significant impact on the agricultural sector output in Nigeria, this that as government budget deficit increases, and channeled to agricultural sector, the sector continues to grow. Government Expenditure on Agricultural Export (GXP) has a positive and significant impact on the agricultural sector output in Nigeria, in other words, government should spend more on agricultural sector in order to promote and encourage its growth. The total government expenditures on agricultural sector were found to have a positive influence on agricultural growth in Nigeria. It showed that the amount of government expenditures towards the growth of the sector has been favourable. Suggestive from the analysis therefore is that Government should increase her budgetary allocation to this sector in a consistent manner because of its importance to the national economy, hoping that with proper monitoring of fund, it would contribute more significantly to the economy of the country. Customs and excise duties on agricultural exports should be stream-lined and more incentives should be given to rural farmers since they covered the larger population in agricultural sector.