The Growth of Nigeria's Economy From 1981 to 2019 in Relation to the Financing of Agriculture

Abstract

The analysis of various economic variables in Nigeria from 1981 to 2019 shows that the country’s economy has been heavily reliant on oil exports, which has left it vulnerable to external shocks and hindered economic growth. This over-reliance on oil exports has led to neglect of the agricultural sector, which was once the main source of foreign currency earnings for Nigeria. As a result, there has been a decline in food production and an increase in imports. However, a study investigating the impact of government spending on agriculture on Nigeria’s economic growth using secondary data covering the same period shows that investing in agriculture is essential for Nigeria to achieve a diversified economy and sustainable economic growth. The study uses the Ordinary Least Square (OLS) approach and the Augmented Dickey-Fuller (ADF) unit root test to analyze the data and concludes that diversifying the economy into non-oil industries, such as agriculture, is likely to have a significant impact on economic growth. The regression analysis showed that government agricultural spending has a positive impact on economic growth. The findings suggest that RGDP, AO, AL, AE, and IFR had an up-down tendency, while INT had an up-down-up trend. The skewness statistic indicates that the variables’ frequency distributions were positively skewed, while the Kurtosis statistic indicates that they were normally distributed. The unit root tests indicate that all variables were stationary at 5%. The regression analysis showed that AO had a positive association with RGDP, while AL had a negative association with it. The study also provides additional information, such as the contribution of agriculture to Nigeria’s GDP and the statistical reliability of the variables.