Abstract
This paper examines the long run relationship between agricultural output and economic growth in Nigeria for the period 1981 to 2014 using time series data. Results from Johansen maximum likelihood co-integration approach and Vector error correction model support evidence of long run relationship between agricultural output and economic growth in Nigeria. Granger causality test also confirms the co-integration results indicating the existence of causality between agricultural output and economic growth in Nigeria. The nature of the causality however depends on the variable used to measure Agricultural output. The paper therefore recommends that the government should further strengthen agricultural policies in the area of funding, storage facilities, and market access to enhance agricultural production. Policy Strategies that will make agriculture more profitable and attractive, less laborious with improved technology should be adopted and promoted to attract investors and the youths back to agriculture.
Highlights
The growth and development of any nation depend to a large extent, on the development of agriculture according to Iganiga and Unemhilin (2011)
The results revealed that agricultural sector is contributing higher than the petroleum sector, though they both possessed a positive impact on the economic growth and development of the economy
The Vector Error Correction Model is used to determine the speed of adjustment of the variables i.e. how errors generated in the short run are corrected in the long run equilibrium path
Summary
The growth and development of any nation depend to a large extent, on the development of agriculture according to Iganiga and Unemhilin (2011). According to Nwankwu (1981) the role of agriculture in reforming both the social and economic framework of an economy cannot be over-emphasized. It is a source of food and raw materials for the industrial sector. World Bank in a report (2014) concluded that in many developed and developing countries agriculture has been the main source of gainful employment, a source of basic food supply with which the nation can feed its teeming population, a regenerative source of foreign exchange earnings, means of providing the nation’s industries with local raw materials, and as a reliable source of government revenue. The Nigerian government has formulated various policies and programmes aimed at strengthening the sector in order to continue to perform its roles
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