Ovidius University Annals: Economic Sciences Series (Jan 2020)
Forecasting Nigeria Agricultural Growth in the Era of Dwindling Oil Price
Abstract
The persistent volatility in the price of crude oil has intensified the comparable challenges to generate jobs and foster inclusive growth in oil-exporting countries. The non-oil sector such as agriculture tends to be low and was subsequently the only source of growth and jobs. While a country like Nigeria has the forward and backward linkages of agriculture as the impetus for growth, the impact of dwindling oil prices on agricultural growth remains grossly understudied in extant literature. This study focuses on examining the impact of oil price on agricultural output growth in Nigeria over 1995-2019 through the quantile regression technique. This methodology provides a more robust estimate against outliers in response measurement of the nexus between indices of oil price and agricultural output growth. Our findings indicate that crude oil prices have a negative effect on the performance of the Nigerian agricultural sector and have been consistent with the results of the OLS assessment. The policy implication of this finding implies that agricultural production in Nigeria can be amplified by diversifying the economy; shifting emphasis away from the crude oil export only and focused more on the domestic production of agricultural output to compensate for the loss of revenue emanating from oil wealth. Also, the government as well as the private firms should team up to address the infrastructural deficit by investing in the agricultural sector to optimize the agricultural value chain for growth and development of the nation.
