Returns to Public Investment in Agricultural Research and Extension in Nigeria: An Economic Assessment

This study provides an economic assessment of the returns to public investment in agricultural research and extension in Nigeria, estimating the economic benefits generated per unit of government expenditure and comparing returns across investment categories. Public investment in agricultural research and extension is widely recognised internationally as having among the highest economic returns of any public spending category, yet Nigeria's investment levels in both are chronically below international benchmarks. This study uses a benefit-cost framework combining production function econometrics with agricultural sector simulation modelling. Public agricultural research expenditure data from NAERLS, IAR, IITA-NARS collaboration budgets, and extension ADP budgets from 2000 to 2022 are compiled and analysed alongside state-level agricultural productivity panel data. Distributed lag production function models are estimated to capture the time-lagged effect of research and extension investment on productivity. Findings reveal that public agricultural research investment generates internal rates of return of 28 to 42 percent in Nigeria, well above the social opportunity cost of capital. Extension investment returns average 18 to 24 percent. However, current investment levels are approximately 60 percent below the level required to sustain positive productivity growth trajectories. The study concludes that Nigeria significantly underinvests in public agricultural R and D and extension. It recommends a doubling of the agricultural research budget and a results-based extension funding framework.

Keywords: public investment, agricultural research, extension returns, Nigeria, benefit-cost analysis.