The effect of government expenditure on agricultural production in Uganda from 2000 to 2009

Abstract

This study sought to assess the impact of government expenditure and agricultural production in Uganda using secondary data about World development Indicators collected by the World Bank 2018. The study employed Vector Error Correction model to establish the long run relationship between Government Expenditure and Agricultural production. The study found out that there exists a long run relation between Agricultural production measured as crop production and government expenditure and Government expenditure which was broken down into Capital Expenditure, Recurrent Expenditure and Total Expenditure. Long run cointegration relationship estimated showed that an increase in Crop production leads to increase in Recurrent Expenditure by 4.9% and a decrease in Total Expenditure by 2.23%. Therefore, the study recommended that Agriculture should be promoted in the country, through providing of Agricultural loans, providing seeds and teaching farmers on how to carry out Agriculture even on a small piece of land and also Sensitization should be done to encourage people to investment more in the Agricultural sector, most people look for white color jobs and abandon Agriculture, yet Agriculture sector has a lot of benefits as a sector. Thus, people should be encouraged to invest more in it.