The study assessed the impact of government capital expenditure on the agricultural development of Yobe State because the state is an agricultural state with vast land and labour of which if developed through government capital expenditure in form of an investment in the agricultural sector should bring about agricultural development. But inspite of the effort of the government on yearly huge spending on the agricultural sector, farmers still do not have access to modern farm equipment and fertilizer. Therefore, the main objective of the study is to find out the impact of government capital expenditure on the agricultural development of Yobe state, using the Wagner‟s law of expanding state activity as the theoretical frame work. The study used both primary and secondary sources of data. The primary data were collected directly from the respondents (farmers association) using questionnaire and focus group discussion while the secondary data were obtained from the Yobe State Ministry of Budget and Economic Planning and Agricultural Development Programme for the period 1992 to 2016. The secondary data were analysed using VAR model while the primary data were analysed using chi-square test mean scale and correlation matrix. The findings of the study revealed that there is positive but insignificant relationship between government capital expenditure and agricultural development in Yobe State during the period under study. The findings also showed that there is no relationship between the provisions of farm input such as agro-equipment and fertilizer on crop production for agricultural development. However, the study recommends that agricultural financial policies that are targeted at agricultural input-output aimed at ensuring profit given and at the same time economic friendly by providing assistance to crop producers with the help of various agricultural resources such as agro-equipment, which includes tractors, harvesters, corn milling machines, sprayers, plough, water pumps, and chemical equipment machines used on the farm to enhance large scale crop production with latest techniques and facilitating diversity within the purview of agricultural development through capital expenditure because these agro-equipment are capital intensive and cannot be afforded by individual farmers as most of them are poor.