IMPACT OF AGRICULTURAL PROTECTION ON AGRICULTURAL GROWTH IN NIGERIA: POLITICAL ECONOMY PERSPECTIVE (1980-2016)

Abstract

This study examined the impact of agricultural protection and other macroeconomic variables on agricultural growth in Nigeria from 1980 to 2016. The specific objectives were to (i) estimate the level of agricultural protection in Nigeria; (ii) determine the effects of agricultural protection on agricultural growth, and (iii) analyse the causal relationship between agricultural protection and agricultural growth in Nigeria. The data were obtained from annual time series dataset from Central Bank of Nigeria (CBN), World Bank, and Food and Agriculture Organisation (FAO) and were tested using unit root and cointegration tests. Descriptive statistics, Nominal Protection Coefficient (NPC) model, multiple regression and Granger causality were analytical test used, while the hypotheses were tested with F-test. Results revealed a significant presence of protection in the agricultural sector but not statistically commensurate with the share of agriculture to Nigeria's gross domestic product, (GDP). All hypotheses were tested at 1% probability level, i.e. p < 0.01. There was a negative significant relationship between agricultural growth and protection in agriculture. A significant and positive relationship exists between agricultural growth and budgetary appropriation to the agricultural sector, while foreign direct investment and farmers' economic welfare had a non-significant and negative relationship with protection level. There was significant causality running from budgetary appropriation (agriculture) to agricultural protection and from protection level to GDP (agriculture). One of the major recommendations is that government should review its policy instruments, programmes, and projects to ensure that targeted policy objectives such as increase in agricultural growth is achieved by increasing its budget and liberalizing the sector.