A Critical Empirical Analysis of Causal Linkage between Agricultural Output and Real GDP: Evidence from Nigeria

The agricultural sector is pivotal in alleviating poverty, generating employment and providing food. In agriculture, the lingering search for global growth and development could be fulfilled or forfeited. The performance of the sector in recent times leaves much to be desired as its share of aggregate production fluctuated as output grew. Using annualised time series data spanning 1981 to 2018, this study empirically examined the causal relation between the production of the agricultural sector and economic growth in Nigeria. The Granger causality test, vector autoregression, and impulse response and variance decomposition econometric tools have been used to analyse data. The empirical findings suggest that farming In a unidirectional manner, sector production. At the same time, a study of the impulse response suggested that economic growth does not respond quickly to agricultural innovations. The results of our study did not support the Kuznets theorised predictions of agriculture-led development (1968). The policy implications of such research will be profound, especially in the current state of the economy, where resource allocation needs to be optimised for sectors which have the potential to drive growth in other sectors.

Author (s) Details

Dr. Ikechukwu Kelikume
Lagos Business School, K.M 22 Lekki-Aja Expressway, Lagos Island, Lagos State, Nigeria.

Stanley Emife Nwani
Depatment of Economics, School of Management and Social Sciences, Pan-Atlantic University, Nigeria.

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