Abstract
This study analyzed sectoral contributions to Gross Domestic Product by Agriculture, Industry and services sectors of the economy using a Vector Autoregressive (VAR) approach. The test of stationarity using Augmented Dickey Fuller (ADF) showed that all the variables were integrated of order one. Granger causality was used to find the linkages among the variables under consideration. The result showed bilateral causality between GDP and sectoral contribution to GDP by Industry. Thereafter the unrestricted VAR parameter estimate was obtained for GDP and sectoral contribution to GDP by Industry. In conclusion, it is recommended that the Nigerian government should come up with strategic master plan to diversify the economy using the Agriculture and services sectors since the Nigerian economy from our analysis is grossly dependent on sectoral contributions of Industry to GDP.
Highlights
Information on the current state of economic activity is a crucial ingredient for policy making, as choice of the appropriate policy stance relies on the updated knowledge of the macroeconomic framework Roberto and Guiseppe (2004)
The value of Nigerian GDP has been on a steady increase, it becomes pertinent to study how Agriculture, Industry and Services sectors contribute to GDP based on the huge amount of budgetary allocation by the government to these key sectors of the economy in line with the transformation agenda of the present Federal government
From the result of our analysis we identify the contribution of Industry to GDP as a major driving force in sectoral growth of Nigeria since there is bilaterally causality between sectoral contribution to GDP by Industry and GDP
Summary
Information on the current state of economic activity is a crucial ingredient for policy making, as choice of the appropriate policy stance relies on the updated knowledge of the macroeconomic framework Roberto and Guiseppe (2004). The development of the Nigerian economy is one that emanated from a monoculture economy being based purely on the agricultural sector of the economy, making the sector the main stay of the economy. The discovery of the crude oil in 1956 in commercial quantity has nullified this assertion, since it has relegated the hitherto main stay of the economy to the background. The value of Nigerian GDP has been on a steady increase, it becomes pertinent to study how Agriculture, Industry and Services sectors contribute to GDP based on the huge amount of budgetary allocation by the government to these key sectors of the economy in line with the transformation agenda of the present Federal government. This work seeks to determine how diversified the Nigerian economy is at present using
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