Abstract

This study examines the effect of public spending performance of agricultural sector in Nigeria
for the period 1989 to 2018. Time series data on government spending on agricultural sector,
agricultural credit guarantee scheme fund and interest rate (independent) and agricultural
output to gross domestic product (dependent) were sourced from the Central Bank of Nigeria
Statistical Bulletin (2018). The statistical technic used is Ordinary Least Square Regression
(OLS) of multiple regression analysis; Augmented Dickey Fuller unit root test will be conducted
to show the stationary of the variables, the times series data shall be analyzed using 5% level of
significance with the aid of E view statistical package to analyze the data. The finding reveals
that agricultural output to gross domestic product, government spending on agricultural sector,
agricultural credit guarantee scheme fund and interest rate were stationary at first difference.
This means that all the variables have no unit root. The result of t-statistics indicates that
government spending on agricultural sector and interest rate has no significant impact on
agricultural output while agricultural credit guarantee scheme fund has significant impact on
agricultural sector in Nigeria. The f statistics result which showed that the overall estimate of
the parameters has a good fit helps to conclude that public spending has significant effect on the
growth of agricultural sector in Nigeria. The study therefore recommends that government
through CBN should do more to encourage borrowing by bringing the lending rate to single
digit to boost agricultural production output.
Keywords: Agricultural Credit Guarantee Scheme Fund, Agricultural Output, Public Spending,
Interest Rate.