AGRICULTURAL OUTPUT AND ECONOMIC GROWTH ADJUSTMENT DYNAMICS IN NIGERIA

Abstract

This study investigates the extent of the agricultural output translation to economic growth both in the long run and in short run using autoregressive and distributive lag model and Bound test approach. The data used for the study is a transformed annual data into quarterly data for 1980Q3 to 2016Q4 collected from Central Bank of Nigeria statistical bulletin and from World Bank development indicator. Evidence from the study revealed that the log difference of agricultural output has an inverse relation with the log difference of real gross domestic product by 0.15% in the current year and in the short run. In contrast, the log of agricultural output at lag 1 showed a positive relation but not significant at 5% level. The bound test and the Wald test also suggested the absence of long run relationship of log difference of agricultural output, labour, agricultural capital, the net export of agricultural product with real domestic product as the dependent variable at 10%, 5%, 2.5% and 1% level of significance. The speed of adjustment of the system in the long run was 1.60% but not significant at 5% level. The study recommends the promotion and expansion of the sector to increase the output from the sector.