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This study analyses the impact of fiscal policy on agricultural output in Nigeria from 1980-2017. Data for the study were obtained from the Central Bank of Nigeria Statistical Bulletin. In order to achieve the objective of the study, Augmented Dickey-Fuller Unit Root, Johansen co-integration and Vector Error Correction Model were employed. The unit root test conducted shows that the variables were integrated of order one i.e I(1), which means that the variables are stationarity at first difference. The co-integration results showed that long-run equilibrium relationship exists among the variables. Result of the regression shows that government capital expenditure on agriculture has a positive and significant impact on agricultural output, while Government recurrent expenditure on agriculture also has a positive impact on agricultural output in Nigeria. Furthermore, the study also reveals that personal income tax has a negative and insignificant impact on agricultural output. Also, findings from the Variance Decomposition reveal that the predominant sources of variation in all the variables can be attributed to its own shock. The study therefore recommends that government should increase capital budgetary allocation to this sector in a consistent manner because of its importance to the development of the sector and to the national economy. The study further suggests that expansionary fiscal policy measures should be encouraged by the government because it will play a vital role in the growth of agriculture in Nigeria. If this measure is put in place, agriculturalists would be able to have more income to invest in agriculture. Even in the part of the government, when more money is allocated and effectively implemented in agriculture, there would be increase in agricultural output and this would increase the nation’s gross domestic product (GDP).
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In-Text Citation: (Oluwaseun et al., 2020)
To Cite this Article: Oluwaseun, O. A., Solomon, O. I., & Yusuf, M. A. (2020). Impact of Fiscal Policy on Agricultural Output in Nigeria. International Journal of Academic Research in Business and Social Sciences, 10(8), 224–243.
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