FDI Trade and Its Effects on Agricultural Development in Nigeria: Evidence From Time Series Analysis

Abstract

Agricultural sector is seen as an engine that contributes to the growth of the overall economy of Nigeria, despite several government efforts the sector is still characterized with low yields and limited areas under cultivation due to government dependence on mono-agricultural economy based on oil. This study attempts to evaluate the impacts of FDI, trade and its effects on agricultural sector development in Nigeria between the periods of 1980-2009, in analyzing the variables (VAR) model was used employing a three-step procedure. The Unit root test was conducted using the Augmented Dickey Fuller (ADF) and Philips-Parron (PP). Johansen and Juselius multivariate Cointregration test indicate that there is a present of cointregration. Granger causality test result shows that the variables employed have a bidirectional relationship, unidirectional relationship and no casual relationship. It is recommended that in order to boost agricultural output and develop the sector as a whole, more FDI should not only be sourced, there is a need for the government to provide legal and administrative quality framework and encourage more exportation of agricultural output that will enhance foreign exchange earnings and improve the competitiveness of Nigeria agricultural produce in the international market.