IMPACT OF OIL DEPENDENCY ON AGRICULTURAL SECTOR DEVELOPMENT IN NIGERIA (1981–2022)
Abstract
This study empirically examines the impact of oil dependency on agricultural sector development in Nigeria between 1981 and 2022. Secondary time-series data were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Bank Database.
The study employed the Augmented Dickey-Fuller (ADF) test for stationarity and the Autoregressive Distributed Lag (ARDL) model to analyze both short-run and long-run relationships among variables. Variables used include agricultural value added (AGVA), oil rent to GDP ratio (OILR), gross fixed capital formation (GFCF), exchange rate (EXCR), degree of openness (DOPT), inflation rate (INFL), and economic policy reform (DO1).
Findings reveal that oil dependency has a negative and significant impact in the short run but a positive effect in the long run on agricultural development. Inflation, capital formation, and policy inconsistencies negatively affect agriculture, while exchange rate and trade openness show mixed effects.
The study concludes that excessive dependence on oil revenue undermines agricultural productivity and recommends economic diversification policies.
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