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Research Article Open access CC BY 4.0

Effect of Increasing Public Debt on Agricultural Output in Nigeria: (1981-2022)

Ogwuche David D., Mohammed Musa. A

Asian Journal of Economics, Business and Accounting · pp. 621–629 · Published 19 Apr 2024

10.9734/ajeba/2024/v24i51336

Abstract

The study was conducted to examine the effect of public debt on agricultural output in Nigeria using time series data from 1981 to 2022. The study adopted the Augmented Dickey Fuller (ADF) unit root test, the Bound test for long run equilibrium relationship and the Autoregressive Distributed Lag Model (ARDL). The unit root test result showed that the dependent variable agricultural output and exchange rate are stationary at first difference while variables such as government agricultural expenditure and debt service ratio were stationary at levels. The bound test showed the presence of long run equilibrium relationship. The ARDL result estimated that   public debt has no significant impact on agricultural output in Nigeria. Public debt has a negative relationship with agricultural output in Nigeria for the period under study and there is a one directional causality relationship between public debt and agricultural output in Nigeria. Therefore, the study recommended that the country should allocate more funds and improve the institutional quality and policies that will boost the agricultural sector that will be beneficial to the country.

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