Abstract
On the account of assessing the performance of the Nigerian agricultural sector, this study puts in focus the relationship between agricultural funding-based contributions and performance of the Nigerian agricultural sector from 1986 to 2018, following the prescription of financial intermediation theory. It relies on ex-post facto research design, employs and makes use of data from the statistical bulletin of Central Bank of Nigeria, 2018 and Work Bank Economic Outlook 2019. Total government expenditure (TGE), agricultural credits (ACG) and foreign direct investment (FDI) serve as the independent variables; while crop production (CRP), livestock production (LSP), forestry production (FRP) and fishing production (FSP) represent the dependent variables. The study utilizes Jarque-Bera, Breush-Godfrey, Breush Pagan Godfrey, and Ramsey reset for normality tests, Augmented Dickey-Fuller (ADF) technique for stationarity test, Fully Modified Ordinary Least Square (FMOLS) and Engle-Granger Single Equation Co-integration Tests for the search of possible link between the sets of variables. From the analyses, the results of the study reveal that TGE and AGS are significantly and positively related to CRP, LSP and FSP while FDI maintains a negative relationship with them. On another hand, TGE and FDI have negative relationship with FRP, but AGS is positively related to FRP. The Co-integration analysis reveals that there is a long run relationship between all the variables used in the four models. On this basis, the study concludes that agricultural funding-based contributions have significant and long run relationship with the performance of the Nigerian agricultural sector. The paper recommends that government should strengthen agricultural credit guarantee scheme and increase expenditures on the sector.
Highlights
It is unarguable that agricultural sector makes actual and significant contributions to the Nigerian gross domestic product (GDP) profile
The results of the study reveal that Total government expenditure (TGE) and AGS have a positive relationship with crop production, while foreign direct investment (FDI) has a negative relationship with CRP
The results of the fourth model show that TGE and AGS have a positive relationship with fishing production (FSP), while FDI is found to be negatively related with FSP
Summary
It is unarguable that agricultural sector makes actual and significant contributions to the Nigerian gross domestic product (GDP) profile. The agricultural sector provides cash crops which constitute the most important source of revenue for most of the states of West Africa. During the pre and immediate post-independence era, the survival of the Nigerian economy was predicated on agriculture (Faluyi, 1996; Papapavlou & Satraki, 2013). It contributed 90% of the nation’s domestic production and foreign exchange earnings before oil was explored and exploited in commercial quantity in early 1970s (National Bureau of Statistics, 2014). Arising from the above stand point, the central role of agriculture cannot be overemphasized or underestimated in the economy of any nation, especially the developing ones (Oji-Okoro, 2011)
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