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Analysis of Agriculture and Gross Domestic Product of Nigeria using First Difference Regression Model

AUTHOR(S):

M. O. Adenomon

JOURNAL: Journal of the Nigerian Statistical Association Vol. 28, 2016
YEAR: 2016

ABSTRACT

The dwindling oil price in the international market reveals the fact that the Nigerian economy needs to be diversified to develop the non-oil sector, of which agriculture is an example of the non-oil sector. It well reported in the literature that agriculture in Nigeria is a major sector of the economy, providing employment for about 70% of the population. This paper examines the relationship between agriculture and GDP in Nigeria using data from 1960 to 2014. Annual data for agriculture and GDP was extracted from CBN Statistical Bulletin. The ADF test revealed that agriculture and GDP variables are stationary at first difference. The evidence from bound testing and Johansen cointegration test revealed that agriculture and GDP variables are not cointegrated. Lastly, evidence from the first difference revealed that a 1% increase in the change of agriculture leads to about 90.86% increase in the change of GDP. This paper recommends that in this period of fall in oil price, an investment that will grow the agricultural sector should be encouraged so as to enhance economic growth.

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2016

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