The Effect of government agricultural expenditure on agricultural output in Zimbabwe · Electronic Theses and Dissertations

Author

Mukono, Frank

Title

The Effect of government agricultural expenditure on agricultural output in Zimbabwe

Abstract

Government agricultural expenditure is important for the success of agricultural sector leading to economic growth and development. There is a global increase in recognizing the importance of public financing on agriculture in terms of supporting economic growth and development . The primary purpose of this study was to assess the contribution of government agricultural expenditure on agricultural output in Zimbabwe. Specifically, the study investigated the impact of public financing on agriculture's contribution to agricultural GDP. The study focused on the classical and the modern theories mainly the Neoclassical Growth Theory, Transmission Mechanism Of Fiscal Policy, Agriculture Development Theory, Keynesian theories, Agricultural-led industrialization theory, Dual Economy Theory , the public expenditure theory and Endogenous Growth Theory. This study adopted an explanatory correlational study design since it helped the researcher to comprehend and describe how government agricultural expenditure drives economic growth through expansion in agricultural output . In this study all agriculture sector received funding from the government through budget allocated to agriculture denominations namely crop production, fisheries, forestry and and animal farming constituted the population since 1990. The agriculture sector was selected due to its importance in Zimbabwe achieving the economic pillar of Vision 2030. The data gathered was presented and analysed in a way that enabled statistical inferences to be made. Statistical methods of presentation such as descriptive statistic tables ,ARDL model, correlations and multiple linear regression model were used to help in achieving meaningful interpretation. Tests were performed on sample data to ensure that required conditions were met before regression modelling. The model was fitted using EViews 10 statistical data analysis package. In a correlational study, the researcher examined whether and to what degree a statistical relationship exists between agricultural expenditure on agricultural output . This study employed Autoregressive Destributed Lag to ascertain the statistical relationship between agriculture sector financing and agricultural productivity . To evaluate the appropriateness and validity of the model the study analysed the properties of the statistical distribution of the residuals generated by the fitted model to check for autocorrelation, heteroscedasticity and normality. The overall significance of the model was also evaluated by inspecting the model’s coefficient of determination (R-squared) and the probability value for the F-statistic. The research findings suggested that government expenditure on agriculture has a positive impact on agricultural output both in the short run and in the long run. Therefore an increase in GEA is associated with a corresponding increase in AGOUT as a 1% increase in GEA in the long run results in a 0.332957 increase in AGOUT and also 0.190369 increase in the short run.Therefore policymakers should consider increasing government investment and expenditure in the agricultural sector, as this can have a positive multiplier effect on agricultural output, as suggested by the Keynesian theory. Targeted and efficient allocation of agricultural expenditure like incentives to farmers, providing fertilizers and also programes like command agriculture and pfumvudza showed be invested more on as they can help boost productivity, modernize farming techniques, and improve access to inputs and infrastructure.

Date

June 2024

Publisher

BUSE

Keywords

Government agricultural expenditure

Agricultural output

Supervisor

Mr. Bindu