Impact of macroeconomic factors on economic growth, agricultural output and export in Nigeria

The correct determinations of the macroeconomic factors would drive economic growth especially the agricultural output and export for a specific country. Thus, the main objective of the study is to ascertain the major macroeconomic factors that would drive Nigeria’s economic growth and agricultural sector in terms of output and export. The long-run and short-run effects of the macroeconomic factors identified on economic growth, agricultural output and export are examined. In addition, the direction of Granger causality among oil export, agricultural export and economic growth is
determined. This study used the data span from 1981 to 2014. Augmented Dickey Fuller (ADF) and Philips and Perron (PP) unit root test were employed to test for stationarity of the series. The bound testing was then used to examine the existence of long-run relationship, while Autoregressive Distributed Lag (ARDL) was used to examine the long-run and short-run relationship. Finally, the Granger causality was employed to test further relationship among oil export, agricultural export and economic growth. The results indicate that agricultural export and crude oil price have positive and significant impact on economic growth in the long-run but insignificant in the short-run. In the short-run, agricultural land and crude oil price hindered agricultural output with
government spending on agriculture and unemployment rate being positive and significant on agricultural output. In the long-run, agricultural land and crude oil price have positive and significant impact on the agricultural output; though unemployment rate is negative and significant. Structural Adjustment Policy (SAP) has negative and insignificant impact both in the short-run and long-run on agricultural output but negative and significant on agricultural export. Hence, the study suggests that an increase in the quantity of agricultural export, government spending, improvement in SAP and the rise in the crude oil price will enhance the nation’s agriculture and
economic growth.