Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

Tewodaj Mogues and Tolulope Olofinbiyi. 2017. Institutions and Public Agricultural Investments: A Qualitative Study of State and Local Government Spending in Nigeria. Feed the Future Innovation Lab for Food Security Policy Research Paper 56. East Lansing: Michigan State University 

This Food Security Policy Research Paper has also been published as IFPRI Nigeria Strategic Support Program Working Paper No. 37 in November 2016.

INTRODUCTION
Agriculture offers significant potential for pro-poor growth and improved food security and nutrition in many African countries, including Nigeria (World Bank 2007; Diao, Hazell, and Thurlow 2010; de Janvry and Sadoulet 2010). The sector employs approximately 49 percent of Nigeria’s total workforce and contributes about 20 percent of Nigeria’s gross domestic product (United Nations 2016). Moreover, a significant accumulation of evidence demonstrates that public spending in agriculture is one of the most direct and effective ways of promoting agricultural growth, generating income, and reducing poverty (see Fan 2008; Mogues and Benin 2012). Evidence is also mounting on the potential for public agricultural spending to significantly improve nutrition and health outcomes (see Mogues, Fan, and Benin 2015). However, public agricultural spending in Nigeria remains low by several measures. Between 2003 and 2014, only 3 percent of Nigeria’s total budget, on average, was spent on agriculture (ReSAKSS 2016). This level of spending falls short of the Comprehensive Africa Agriculture Development Programme target of 10 percent—a prominent commitment of the Maputo and Malabo Declarations[1].  A more appropriate measure is the sufficiency of public agricultural spending relative to the sector’s contribution to the economy—also known as the intensity of public spending (Mogues et al. 2012). During the same period, the intensity of public spending on agriculture in Nigeria averaged 1.9 percent—a level too low to sustain the nation’s investment needs in agriculture.

[1] During the Second Ordinary Assembly of the African Union in 2003, African governments pledged in Maputo to allocate at least 10 percent of their national budgets to the agricultural sector in order to achieve 6 percent agricultural growth annually under the CAADP agenda (AU 2003). In 2014, during the Twenty-third assembly of the African Union in Malabo, African governments committed to enhancing investment finance in agriculture, in addition to other commitments (AU 2014).