FISCAL POLICY AND AGRICULTURAL SECTOR OUTPUT GROWTH IN NIGERIA

Abstract

The quest for every government to maintain a stable and steady economic growth continues to mount great pressure on policy makers to design and implement adequate and effective policies to spur the activities of the real sector.  This paper examined the impact of fiscal policy tools on agricultural sector output growth in Nigeria with annual data from 1980 to 2023. Autoregressive distributed lag (ARDL) technique was employed for the analysis and the empirical results confirmed that government expenditure on agricultural sector and domestic capital formation had positive and significant effect on agricultural output. Value added tax had negative and insignificant effect on agricultural sector output. Other findings showed that exchange rate had a negative but significant impact on agricultural output in the short run while in the long run exchange rate had a positive and significant impact on agricultural output. Inflation rate had a negative and insignificant effect on agricultural output both in the short run and long run periods. Based on the findings, the paper recommends policies such as increase in government budget on agriculture as necessary and sacrosanct to expand the activities of the real sectors especially that of agricultural sector in order to meet the target of sustainable development goal two (ZERO HUNGER) and also to curb food insecurity through direct domestic production.&nbsp