Trade Policy, Infrastructural Development and Agricultural Sector Value Added in Nigeria

Abstract

The collapse of the international price of crude oil in 2015 and its attendant negative consequences on government fiscal capacity and development efforts re-echoed the need for Nigerians to return to agriculture as the surest means of conserving foreign exchange and revamping productive capacity. Within this context, this paper investigates, using the Autoregressive Distributed Lag methodology, the impact of Nigeria’s trade policy and infrastructural development on agricultural value added. Findings show that in the long-run Nigeria’s trade liberalisation policy is a disincentive to the growth of the agricultural sector’s value added, while key components of infrastructure (roads, telecommunications and electricity consumption) had a significant relationship and positive impact on the agricultural sector. Inter alia, the paper recommends that government strengthen the current selective ban on some agricultural products while it implements the recommendations of the African Development BankInfrastructure Plan for Nigeria.