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THE CONTRIBUTION OF AGRICULTURAL SECTOR ON THE ECONOMIC GROWTH OF NIGERIA.
ABSTRACT
Agriculture is known as the engine and panacea for economic growth in most developing nations of the world. As once asserted by Nobel laureate in economics Gunner Myrdal “The battle for long-run economic growth is either won or lost in the agricultural sector”. Nevertheless, how this path births economic prosperity has been the subject of debates among economist and development scholars. It is on this premise that this study is based. This study empirically examines the impact of agricultural sector on the economic growth of Nigeria. The study is conducted using annual time series data running from 1981 to 2013. The study employs Johansen multivariate cointegration test and Vector Error Correction model (VECM) as the estimation techniques. The results of the study reveals that Real Gross Domestic Product (RGDP), agricultural output and oil rents have a long-run equilibrium relationship according to the Johansen Multivariate cointegration test. Whereas, the VECM result shows that the speed of adjustment of the variables towards their longrun equilibrium path was low, estimated as 10.3042%. Based on the empirical outcomes of the result obtained, the following recommendations were offered: Firstly, government and financial institutions should make credit facilities readily available to farmers with little payback. Secondly, government should promote the diversification of the Nigerian economy to other non –oil sector and more allocation in terms of budgeting to the agricultural sector.
Keywords: Agriculture, Economic growth, Nigeria, Time series, Cointegration,
Vector error correction model (VECM).