A Dynamic Analysis of Oil Revenue and the Performance of the Agricultural Sector in Nigeria

Abstract

The main objective of the research is to empirically investigate the relevance of oil revenue to agricultural development in Nigeria. This is important because despite the numerous efforts by successive governments to diversify the economy, the level of agricultural output still remains abysmally low. The fallen oil price in the international market also makes this research to be timely. The research covered the period between 1981 and 2014. The cointegration technique and the granger causality tests were used for the study. The result indicates that oil revenue is not statistically significant in explaining the level of economic growth. The result of the granger causality test indicates that oil revenue does not granger cause agricultural output. The result is symptomatic since it casts some doubts on the diversification policies of successive governments in Nigeria. The result recommends, amongst others concerted efforts to revamp the agricultural sector through judicious use of the dwindling oil revenue and foreign investors should be encouraged to go into the agricultural sector in Nigeria.