The empirical analysis of agricultural exports and economic growth in Nigeria

Agriculture is both the main sector that is expected to provide employment to large segments of the population and the key to sustained economic growth of the countries. This study presented an empirical analysis of the effect of Agricultural Exports on economic growth of Nigeria. The model built for the study proxy gross domestic product as the endogenous variable measuring economic growth as a function of real exchange rate, real Agricultural exports, Index of Trade Openness and Inflation rate as the exogenous variables. Annual time series data was gathered from Central Bank of Nigeria Statistical bulletin, National Bureau of Statistics (NBS), CBN Economic and Financial Review Bulletin and CBN annual reports spanning from 1970 to 2012. The study used econometric techniques of Augmented Dickey-Fuller (ADF) unit root test, Johansen co-integration test and error correction method (ECM) for empirical analysis. The results of unit root suggested that index of trade openness and inflation rate was stationary at a level while real gross domestic product, real exchange rate and real agricultural exports were integrated at order one. The co-integration test showed that, long-run equilibrium relationship exist among the variables. The findings from the error correction method show that Agricultural Export has contributed positively to the Nigerian economy. The study recommended that, the government reform agenda should be systematic and sustained irrespective of the professional background of the successive presidents of the country and that; Agricultural production should be more desired than other sectors that are exhaustive in nature (oil) evidenced to the recent fall in price of crude oil which has rendered Nigeria in economic shambles.   Key words: Agricultural exports, economic growth, trade openness, Dutch disease and exchange rate.