EFFECT OF MEDIUM TERM EXPENDITURE FRAMEWORK ON SUSTAINABLE AGRICULTURAL SECTOR DEVELOPMENT IN NIGERIA

This study examined the Effect of Medium Term Expenditure Framework (MTEF) on the Agricultural Sector Development in Nigeria. We established the relationship between government capital and recurrent expenditure on agricultural productivity and contribution to Nigeria GDP. The'model for the time series analysis has government capital and recurrent expenditure on agriculture, as the explanatory variables while agricultural sector productivity and contribution to Nigerian GDP are the dependent variables. Using secondary data from CBN statistical bulletin, Federal Ministry of Finance, Budget and Planning, Fiscal Responsibility Commission (FRC) publication and National Bureau for Statistics applying the econometrics method of co-integration error correction mechanism and granger causality test methods. We discovered that the model depicted by the ECM result shows that the coefficient of government recurrent spending on agriculture has no positive significance on agricultural productivity and contribution to GDP. On the other hand, MTEF capital allocation has significant effect on productivity and contribution to GDP. The coefficient of ECM shows that there exists a long-run equilibrium relationship among the variables. This is because the coefficient of ECM is negative and significant. Based on these findings, we recommended among others that: Since government capital expenditure is positively and significantly related to agricultural productivity and contribution to Nigerian GDP, government should increase more of her capital budgetary allocation to the agricultural sector in order to boost productivity.