New NSSP Working Paper measures the degree to which a change in key macroeconomic variables influences the ability for state ministries of agriculture to sustain agricultural program funding

The International Food Policy Research Institute (IFPRI)’s Nigeria Strategy Support Program (NSSP) has published a new Working Paper entitled “Macroeconomic factor influence on agricultural program sustainability in Kaduna state, Nigeria”. The paper is co-authored by IFPRI Abuja Office researchers Dr. Patrick Hatzenbuehler (Associate Research Fellow) and Dr. George Mavrotas (Senior Research Fellow). In this study, Hatzenbuehler and Mavrotas, measure the degree to which a change in key macroeconomic variables, such as the global oil price, influences the ability for state Ministries of Agriculture to sustain agricultural program funding. More precisely, the authors estimate and compare the degree to which Nigerian federal and Kaduna state government revenues co-move with the global oil price, assess the degree to which the Kaduna government has historically relied on federal allocations to fund its activities, and evaluate the share of the Kaduna Ministry of Agriculture and Forestry (KDMAF) budget that is provided by donors in order to measure how much the KDMAF budgetary condition can change due to adjustments in the global oil price or reductions in donor funds.

The authors argue that historical fiscal data and empirical results show that the federal government structure and heavy reliance of the Nigerian federal government on oil sector fees and rents for its revenues mean that changes in the global oil price substantially influence budgetary conditions in all levels of government. The institutional structure of the federal government, however, also provides an opportunity for the Federal Ministry of Agriculture and Rural Development (FMARD) to provide a buffer to state Ministries of Agriculture during periods of poor state government funding conditions, such as when donor funds are reduced or removed. This is because FMARD has some autonomy regarding the allocation of its own budget and can reserve part of it to temporarily support programs of state Ministries of Agriculture that advance the FMARD policy agenda. Therefore, improving budgetary coordination between the federal and state government Agricultural Ministries would plausibly help sustain agricultural program funding levels over time.

This publication is one of the outputs of the Feed the Future Nigeria Agricultural Policy Project, a joint effort between IFPRI-NSSP and Michigan State University which is funded by the United States Agency for International Development (USAID/Nigeria).

You can access NSSP Working Paper 48 by clicking the following link: http://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/131441