Impact of Fiscal Policy on Agricultural Output in Nigeria

Abstract

This study examines the impact of fiscal policy on agricultural output in Nigeria using the most recent official data. The metrics for fiscal policy is government capital expenditure and custom duties on fertilizer. The study used annual time series data obtained from CBN annual statistical bulletin, NCS, and FIRS which was found to be stationary at the order of I(1) and I(0). The order of unit root test led to the use of ARDL estimation method employed in the empirical analysis of this research work. The study found evidence of both short and long run relationship between the variables (VAO, GEX, IDMF, and ACGSF) using both Johansen co-integration and ARDL Bounds test. Although government expenditure (GEX) to agricultural sector was found to be statistically insignificant which recommend that government should increase agriculture capital expenditure to ensure that its contribution is significant. Consequently, custom duties on fertilizer (IDMF) was found to be negatively signed and significant indicating a negative impact on agricultural output. This demands that the policy makers should be prudent in the use of fiscal policy instrument in achieving its desired objective.

Does Fiscal Policy Tools have the Potential to Stimulate Performance of Manufacturing Sector in Nigeria?

“…To buy basic commodities, be sure to carve out a substantial amount of your income. Interest rate's negative relationship with manufacturing sector output is in agreement with Okpe (2018), Olawale, Ijirshar, Tersugh, and Yahaya (2017), and Njoku, Okezie, and Idika (2014). But it refutes the results of Mensah, Ofori-Abebrese, and Pickson (2016), and Falade and Oladiran (2015).…”

“…There are Interest Rate (INTR) and Inflation (INFL). A modified model of Olawale, Ijirshar, Tersugh, and Yahaya (2017) for a study in Nigeria was adapted. The functional form of Olawale, Ijirshar, Tersugh, and Yahaya (2017) is expressed as: = ( ) (1) Where:…”

“…The prove recommends that manufacturers in Nigeria are not maximizing the benefits associated with various fiscal and monetary policies of the government. Olawale, Ijirshar, Tersugh, and Yahaya (2017) examined the effect of government financial development on the yield of the manufacturing sector from 1970 to 2014. Data collected were dissected following the Auto-Regressive Distributive Lag (ARDL) approach.…”

Examining the Effects of Oil Price Long Memory and Exchange Rate Long Memory on Stock Market Behavior in Nigeria

“…The study of the relationship between stock market prices and macroeconomic variables at the second stage is believed to produce better results for significant policy formulation (Hsing, 2011;Chinzara, 2011;Isola et al, 2015;Lawal et al, 2016Lawal et al, : 2017aLawal et al, : 2017bOtekunrin et al, 2018;Dahunsi et al, 2019;Hsing, 2011). The literary approach to the relationship was most frequently taken using data from the Nigerian economy (Somoye and Ilo, 2008;Ologunde et al, 2006;Oracle and Okoro, 2014;Okere et al, 2019;Lawal et al, 2018aLawal et al, : 2018b.…”

Testing mean-reversion in agricultural commodity prices: Evidence from wavelet analysis

“…On the other hand, evidence of stationarity implies that future movement in agricultural commodity prices based on historical evidence is predictable. Under this condition, where commodity prices are predictable, it can be argued empirically that agricultural commodity prices are mean reverting (Brooks, Prokopczuk, Wu, 2015;Alexakis, Bagnarosa, & Dowling, 2017;Ganneval, 2016;Lawal, Fidelis, Babajide, Obasaju, Oyetade, Lawal-Adedoyin, Ojeka, and Olaniru, 2018;Barbaglia, Wilms, & Croux, 2016;Biao Guo, 2018;Tse, 2018;Lawal, Somoye, & Babajide, 2018).…”