BACKGROUND OF THE STUDY
In the world today, the agricultural sector operates as the catalyst that accelerates the pace of structural transformation and diversification of the economy of any country, enabling the country to fully utilize its factor endowment, depending less on foreign importation of agricultural product or raw materials for its economic growth, development and sustainability. The contribution of the agricultural sector of the economy cannot be over emphasized when considering its role in building grounds for development, its employment potentials and financial impacts on the economy. Aside laying solid basis for the economy, it also serves as import substituting sector, providing ready market for raw materials and intermediate goods.
Economic recession on its part is simply understood to be an all-round slowdown or meltdown in economic activity for two sequential years. During this period of economic recession, there is often times a rejection in certain macroeconomic pointers such as government expenditure, employment, investment spending, capacity utilization, household income, business income and inflation, with the resulting influence on government spending in all sectors of the economy in other to avoid total economic. Naturally, if an economy has two years sequential record quarters of negative growth in real gross domestic product, the country will be said to be in economic recession. Gross domestic product is the market value of all legitimately acknowledged final goods and services produced in the country in a given period of time, usually one year.
The issue of the economic meltdown in Nigeria and its effect on government expenditure in the agricultural sector has triggered much argument in modern literature. Globally, the economy have experienced the most unpleasant moments over the years. The issue on its own has been described as probably the worst financial crisis that has never been experienced since the great depression of the 1930s. When it comes to Nigerian economy, it has experienced stagnation for almost two years or more now in all sectors of the economy.
STATEMENT OF THE GENERAL PROBLEM
Nigeria has been an economically slavish neocolonial state. The present economic recession in Nigeria is a manifestation of long-term ills in the structure of the economy that became full-blown under the present government. The recession seems to affect socio-political structures, Nigeria’s credit condition, all sectors of the economy with special reference to the agricultural sector, general living standard, imports, production and employment as well as consumption demand in Nigeria. Fast developing economies like China, India, Brazil, including Vietnam and Thailand depend on exports to drive their economies. Nigeria cannot afford to do otherwise. More than 70 percent percent of Nigerians still lack basic necessities of Life. The importation of petroleum products covers 30 percent of Nigeria’s GDP, importation of agricultural products like rice, fish, cassava starch, sugar and processed tomatoes take 20 percent; importation of garments and fabrics 15 percent, importation of cars and electronics 20 percent; resulting to sky-rockets inflation of 17.8 percent in 2016.The demand for foreign exchange and imports (including imports of petroleum products) remained high in the face of dwindling oil revenue. Nigeria is faced with the twin problems of reduced volume of exports and reduced price of crude, resulting to reduced revenue and increased expenditure in other to meet up. The implications are that the federal and state budgets cannot be funded adequately resulting to external borrowing and debt financing. These have negative implications on foreign exchange and imports of raw materials, low absorptive capacity, job losses, increased tax evasion and avoidance, low purchasing power, low standard of living caused by economic recession.
AIMS AND OBJECTIVES OF THE STUDY
The major aim of the study is to examine the impact of economic recession on government expenditure in the agricultural sector. Other specific objectives of the study are;
H01: Economic recession has no significant effect on government expenditure in the agricultural sector.
H02: There is no significant relationship between economic recession and government expenditure in the agricultural sector.
SIGNIFICANCE OF THE STUDY
The study would be of immense importance to government at all levels and related stakeholders as it would reveal the impact of economic recession on government expenditure in the agricultural sector. The study would also be of immense importance to students, researchers and scholars who are interested in developing further studies on the subject matter.
SCOPE AND LIMITATION OF THE STUDY
The study is restricted to the evaluation of economic recession in Nigeria and its impact of government expenditure in the agricultural sector using federal ministry of agriculture FCT as a case study.
LIMITATION OF THE STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.