Agriculture and Economic Growth: A Nigerian Perspective

Abstract

In Nigeria, there has been a longstanding concern over the need to improve and sustain productivity in the agricultural sector. To remain competitive in the global market, Nigeria must focus on producing goods and services through the agricultural sector. Therefore, a sustained increase in production in this sector is paramount for the country’s survival and ability to compete with other nations. This study investigates the state of Nigeria’s agricultural sector and its influence on the country’s economic growth from 1989 to 2021. The research utilized secondary data, obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and the World Bank indicators. The study’s objectives were to assess the effect of agricultural production on Nigeria’s economic growth and to determine whether private sector credit to agriculture contributes to that growth. The t-statistics indicate that real GDP, the growth rate of agricultural output, private sector credit to agriculture, inflation, and government spending all significantly impact economic growth at a 5% critical value. However, gross capital formation was found to have no significant effect at the same critical value. The study recommends that the government should focus on fostering a supportive environment to direct more credit to the agricultural sector in Nigeria. This can be achieved through monetary policies made by the central bank such as giving special directives to the commercial banks to issue loans and other credit facilities to players in the agricultural sector.