Knowledge gaps remain as to how longer-term public investments (PI) such as agricultural research and development (R&D), and short-term interventions through other public expenditures in agriculture (PEA) complement each other in enhancing productivity and efficiency in the agrifood sector. This study attempts to partly fill this gap by using nationally representative panel household survey data, subnational PEA data, locations of national agricultural R&D, and various spatial agroclimatic data in Nigeria. The analyses generally indicate that marginal returns to agricultural inputs/services (fertilizer, agricultural mechanization, irrigation, extension, agricultural equipment, and family labor) often increase by PI that raise overall agroclimatic similarity (AS) (through R&D locations), as well as increase PEA-share by subnational governments. There is often complementarity between these PI and PEA, particularly for extension services, investment in agricultural equipment, irrigation, and in the northern part of the country. Promoting further adoptions of modern inputs/services, increasing PEA-share, and selecting PI for agricultural R&D given in-country variations in agroclimatic conditions can help raise agricultural profitability and incomes in Nigeria.

This paper provides a broad view of public sector support to agriculture in Nigeria, through the lens of the allocation of public expenditures by the federal government in support of the sector. We consider the adequacy and stability of agricultural public spending during the period of 2007 to 2016, drawing on data from the Ministry of Finance, the Office of the Accountant General of the Federation, and other sources.

Building on the work of earlier studies that looked at trends in and returns to federal public expenditures on agriculture in Nigeria, this paper explores spending patterns at the sub-national state level over a nine-year period, as well as trends in agricultural and economic performance and indicators of household welfare. Our examination focuses on two groupings of states – the full 37 state units of Nigeria (the 36 states, plus the Federal Capital Territory, Abuja); and the seven states that are the focus in Nigeria of the Global Food Security Strategy (GFSS) of the United States Agency for International Development. Sub-national agricultural spending as a share of aggregate agricultural spending in Nigeria is large, given the stronger role for sub-national governments in agriculture than is the case in other sectors. However, we find that the share of state-level expenditures on agriculture as a share of aggregate state-level expenditures is still relatively low, an average of 3.86 percent over the period 2007 to 2015. While the prioritization of agriculture spending varies greatly year by year, the variation over time does not have a discernible long-run upwards or downwards trend. We also find that agricultural expenditures are more capital intensive than are overall public expenditures at state level, but that capital expenditures as a share of total agriculture spending has decline over the last decade, as is the case overall in Nigeria’s industrial sectors. We conclude that efforts to strengthen state-level agricultural spending in Nigeria merits greater attention, while putting in place measures to ensure improved effectiveness in any such spending.

Whereas there is plenty of work looking at macroeconomic effect of public spending on growth and poverty in Africa as well as studies of the impact of spending or investment in one economic sector on outcomes in that sector or on broader welfare measures, this book fills a much needed gap in the research looking how the composition of public spending affects key development outcomes in the region. The book brings together recent analysis on the trends in, and returns to, public spending for agricultural growth and rural development in Africa. Case studies of selected African countries provide insights on the contributions of different types of public expenditures for poverty, growth and welfare outcomes, as well as insights into the constraints in gaining development mileage from investments in the agricultural sector.

This paper makes a contribution to this literature by drawing on the framework of actor-centered institutionalism (Scharpf 1997) to empirically examine how political and budget institutions affect the incentives of actors involved in the public agricultural finance process, structures the interactions between them, and ultimately shapes expenditure allocations

Agricultural development has long been considered an important driver of overall economic development in developing countries such as Nigeria. Whether increasing public expenditures on agriculture (PEA) can directly improve broad dimensions of household well-being has continued to be debated. In addition, there has been growing interest in the economic flexibility of households to switch between nonfarm and farming activities. Such flexibility can potentially enhance the resilience of households to shocks like the COVID-19 pandemic in today’s rapidly changing socioeconomic environments. Direct evidence of the impact of PEA on broad development outcomes is also important in informing regional initiatives aiming to use PEA as an instrument for overall food security enhancement and poverty reduction in Africa. Using state- and local government area (LGA)-level PEA figures and household data in Nigeria, this study aims to provide initial evidence at the household level in Nigeria. The findings suggest that greater PEA shares have positive effects on various development outcomes at the household level, including consumption, poverty reduction, nonfarm capital investments, and household dietary diversity. The findings also suggest that greater PEA shares are likely to help farm households enhance their economic flexibility. These findings are consistent with the hypotheses of positive linkages between PEA and agricultural outcomes, and linkages between agricultural and nonagricultural outcomes, often advocated in the literature. PEA should be increased by increasing its share of total public expenditures through conscious efforts to reallocate existing resources, rather than trying to increase it by increasing the overall size of public expenditures. Furthermore, it remains important to identify the appropriate sources (for example, spending by LGA or state) and types of PEA (for example, recurrent or capital spending) for particular development outcomes.