The impact of government agricultural expenditure on economic growth: a case of Uganda

Abstract

This study examined the impact of government agricultural expenditure on economic growth in Uganda over the period 1990 to 2021 with time series data collected from the World Development Indicators. The study applied augmented Dickey–Fuller (ADF) unit root test, Phillips Perron (PP), bounds test and the Autoregressive Distributed Lag Model (ARDL) as analytical tools to analysis the data. The results of the bounds test showed that there exists a long-run equilibrium relationship among the independent variables of government expenditure on agriculture, official development assistance, gross fixed capital formation, labor force participation rate, inflation and economic growth in Uganda. The empirical results of regression analysis revealed that in the long run, the elasticities of economic growth to government expenditure on agriculture and official development assistance were 0.0832 and 0.421, respectively. This therefore implies that the government of Uganda should increase its expenditure in the development of the agriculture sector since it would enhance agricultural productivity and economic growth.