Trend analysis of budgetary allocation to agricultural sector in Nigeria

Abstract

Introduction Agriculture continues to dominate the economy of Nigeria in terms of contribution to gross domestic product, job creation, poverty reduction and provision of raw materials. A large proportion of agricultural labour force in Nigeria engaged in subsistence farming rather than modern agriculture. It has greater capacity for absorbing large number of unemployed youth and covers way for overall growth and development (Ajakaiye, 2016). Both theoretical and empirical studies have shown that public spending to agriculture has a significant impact on output and the general performance of the economy (Ahungwa et. al, 2014; Olomola et al. 2014). Therefore, government continue to allocate a significant amount of resources to this sector through lending, subsidies and financing of various programs and policies under numerous sub-sectors aimed at transforming the agricultural sector. However, the sector has not yielded up to the level of expectations. According to Ita et al. (2013), there was instability in the way budgets were allocated to the agricultural sector. Oyinbo et. al (2013) conclude that the relationship between agricultural budgetary allocation and economic growth in Nigeria is positive but not significant in the long run. Therefore, it is vital to examine the nature of trend of budgetary allocation to agricultural sector in Nigeria.