Macroeconomic Environment and the Output of the Agricultural Sector in Nigeria, 1971 to 2010

Abstract

This study examines the relationship between the macroeconomic environment and the output of the agricultural sector in Nigeria during the 40- year period from 1971 to 2010 using the autoregressive distributed lag (ARDL) model of cointegration analysis. Over the long run period, the levels of the real government expenditure and the value of loans disbursed in the agricultural sector were found to influence the level of agricultural sector output as measured by the value added to gross domestic product (GDP). The major implication of the study is that increased loans to the agricultural sector in Nigeria expand the output of that sector and provide favourable conditions for improved livelihood opportunities for rural people and urban poverty reduction through more stable food prices. Further, government resources going into the agricultural sector must emphasise their quality aspects with more attention paid to investment spending compared to recurrent expenditures