The Dynamics between Infrastructure and Agricultural Output in Nigeria 1981 - 2017

Abstract

This paper investigated long run causal relationship between agricultural output and infrastructure in the Nigerian economy over the period 1981 to 2017. Given the importance of agricultural productivity to national food security, development and jobs creation in addition to poverty eradication, it becomes imperative to create enabling environment for greater productivity in the sector by engendering increase in agricultural infrastructure in all its ramifications. This paper employed the vector error correction model (VECM) to analyse data for the Nigerian economy in respect of agricultural output indices and selected infrastructure believed to have the capacity to cause changes in agricultural productivity. It was found that long run equilibrating relationship does exist between agricultural output on one hand and transport and energy infrastructure, level of agricultural mechanisation and vastness of arable land in the country on the other. In particular, changes in electricity generation, agricultural mechanisation and vastness of arable land contributed significantly to the cointegrating relationship though they slowed down agricultural output in the country. This means that agricultural output is sensitive to these selected infrastructures. Moreover,
transport infrastructure and vastness of arable land Granger caused agricultural output in the country. It is hence recommended that government and other stake holders should consider opening up the rural areas by investing in feeder roads so that agricultural produce are given place value and the farmers receiving good price for their effort. The energy sector, particularly electricity generation should be approached in a holistic way given the potential in solar and wind energy in the country. Adequate and efficient electricity generation is key to enhancing agricultural value chains in the area of processing and storage.