Contribution of Agriculture to the Development of the Nigerian Economy

Abstract

Inspite of the fact that the agricultural sector has the potential to contribute significantly to the development of the Nigerian economy, the performance of the economy over the years has not been satisfactory. This study therefore examined the contribution of the agricultural sector to economic development in Nigeria. Specifically, the study investigated the impact of crop production, livestock, fishery and forestry outputs on economic development proxied by per capita income which is measured in terms of per capita real gross domestic product in Nigeria. The analytical techniques applied include Augmented Dickey Fuller (ADF) unit root test, Autoregressive Distributed Lag (ARDL) approach, error correction model (ECM) and Granger causality test. Annual time-series data from 1981 to 2020 were used for the study. The findings indicated that crop production and forestry outputs make strong contribution to the development of the Nigerian economy while the outputs of livestock and fishery make insignificant contribution to economic development of Nigeria. The Granger causality test indicated bidirectional causality between crop production output and economic development and a unidirectional causality from livestock output to economic development. To improve the contribution of agriculture to the development of the economy, it is recommended, among other things, that the government should increase its budgetary allocation to the agricultural sector while providing subsidized agricultural inputs to farmers.