Abstract
The study examined determinants of agribusiness investment in Nigeria. Data for the study are time series collected on quarterly basis from publications of Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and National Population Commission (NPC). Some firms’ specific data were collected from published and unpublished records of forty (40) agribusiness enterprises randomly selected in Nigeria. Vector Auto Regression (VAR) model was used to analyze the data. Among the determinants of agribusiness investment in Nigeria analyzed by the study, tax paid, market size and exchange rate were found to be statistically significant at 5% probability level. Based on the results, it was recommended that government should enforce the policy on five-year tax holiday for young agribusiness firms and also establish Agribusiness Investment Protection Agency which will be charged with the responsibility of liaising with other relevant agencies to create enabling environment for agribusiness firms.
Highlights
Introduction and Literature ReviewAgribusiness investment has been regarded by development economists as a major strategy for achieving a faster rate of economic growth and a higher standard of living in a young economy like Nigeria
Some of the firm specific variables such as amount invested by agribusiness firms in the periods, interest paid, tax paid, retained earnings and income of the agribusiness firm on quarterly basis were updated with average data from forty (40) formal agribusiness firms that were randomly selected from Nigeria
Determinants of Agribusiness Investment: It has often been observed that macroeconomic data are characterized by a stochastic trend, and if untreated, the statistical behaviour of the estimators is influenced by such trend which will lead to spurious regression result
Summary
Agribusiness investment has been regarded by development economists as a major strategy for achieving a faster rate of economic growth and a higher standard of living in a young economy like Nigeria. Mbanasor and Nwosu (1997) supported that agribusiness is the engine of national growth due to its role in raising the output level of the country in addition to increasing GDP and employment generation. Agribusiness output is still very low as evidenced by growing food insecurity and rising rate of unemployment with its associated poverty. The current state of agribusiness investment in Nigeria is under-developed, inadequate and completely distorted. Nigeria is currently not competitive in most of her agribusiness enterprises; even when the sector is supposed to be a dominant economic sector with greatest potentials for growth stimulation and poverty reduction
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