Agricultural Value Added, Governance and Insecurity in Nigeria: An Empirical Analysis

Abstract

Value added agriculture enables farmers to align with consumer preferences with quality characteristics not found in conventional raw material products. Agriculture value added could be under serious threat under poor governance situation and insecurity. This study was therefore undertaken to empirically evaluate the relationship between governance system, state of security and agriculture value added in Nigeria. The study made use of time series data sourced from World Bank Indicators, Central Bank of Nigeria, Institute for Economics and Peace, etc. The study employed Auto Regressive Distributed Lag (ARDL) bound testing procedure to examine the long and short run relationships between the variables. Diagnostic tests were successfully undertaken using Langrange multiplier, Ramsey’s RESET, Jargue-Berra Normality and Heteroskedasticiy tests. The results show that in the long and short run, governance system in Nigeria insignificantly impact agriculture value added. However, security level and technology positively and significantly impact agriculture value added both in the short and long run. The study concluded that governance institutions in Nigeria which provide the means of control, policy formulation, implementation, etc are not effective enough to significantly enhance agriculture value added. On the other hand, though the country has experienced pockets of insecurity in some parts, the state of security has positively and significantly enhanced agriculture value added. The study recommends that policy formulations should be tailored to the short term and long term needs of agribusiness environment and investments. Also, tendencies that hamper the growth and development of the agric sector generally should be discouraged.