Effect of Government Capital Expenditure on Agricultural Development of Katsina State

The study is an attempt to examine the Effect of Government Capital Expenditure on Agricultural Development of Katsina State. It cannot be contested the fact that agriculture is the immediate basis for food production. Therefore, the main objective of the study was to examine the short run and long run dynamic relationship between Government Capital Expenditure and crop production. The study covers the period of 2000-2022 and using Vector Error Correction Model (VECM). Crop production was used as a proxy for agricultural development (dependant variable) and capital expenditure as independent variable. The result indicates that there is a positive and significant relationship between Capital Expenditure (CE) and Crop Production (CP) at 5% level of significance. A percentage increase in Capital Expenditure (CE) in the previous year causes Crop Production (CP) in the current year to increase by about 0.12%. This implies that a percentage increase in capital Expenditure (CE) in the current year will have a positive effect on Crop Production in the following year but at a very low percentage of 0.12. Therefore, the study recommends that; the States should adopt a financial policy framework for agricultural development that will promote public private partnership and reflect the need and intended use of public spending to include financial prudence and efficiency that will alignment with sectoral objectives with higher level of significance that will improve crop production.