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The Role of Agriculture in Nigeria’s Economic Growth: A General Equilibrium Analysis

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  • Ehui, Simeon K.
  • Tsigas, Marinos E.

Abstract

Blessed with abundant land and water resources, Nigeria’s agricultural sector has a high potential for growth, but this potential is not being realized. Productivity is low and basically stagnant. Farming systems, which are mostly small in scale, are still predominantly subsistence-based and for the most part depend on the vagaries of the weather. Many agricultural policies have also been ineffective, either because they have been misguided, or because their impacts have been swamped by macro policies affecting inflation, exchange rates, and the cost of capital. Recognizing these challenges, the Federal Government of Nigeria has identified the modernization of the agricultural sector as a major priority. In this paper we have applied the Global Trade Analysis Project (GTAP) framework to estimate the growth potential of agriculture in Nigeria. Our results show that although a 1% percent technological progress in the oil sector gives the largest welfare benefits in dollar terms ($142.72 million), when we abstract for size several food and agricultural sectors have a value that is higher than that for the oil sector. Some subsectors in the agricultural sectors (e.g. cattle, fruit and vegetables) outperform some of the oil and manufacturing sectors in terms to return to investment. Also our results show technological improvements related to unskilled labor produced the highest returns in agriculture compared to any other sector. In manufacture, the highest returns are obtained from technological improvements related to capital.

Suggested Citation

  • Ehui, Simeon K. & Tsigas, Marinos E., 2009. "The Role of Agriculture in Nigeria’s Economic Growth: A General Equilibrium Analysis," 2009 Conference, August 16-22, 2009, Beijing, China 51787, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51787
    DOI: 10.22004/ag.econ.51787
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    References listed on IDEAS

    as
    1. Ehui, Simeon K. & Tsigas, Marinos E., 2006. "Identifying Agricultural Research and Development Investment Opportunities in Sub-Sahara Africa; A Global, Economy-Wide Analysis," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25527, International Association of Agricultural Economists.
    2. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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    Cited by:

    1. Nkonya, Ephraim & Pender, John L. & Kato, Edward, 2009. "Options for enhancing agricultural productivity in Nigeria:," NSSP working papers 11, International Food Policy Research Institute (IFPRI).
    2. Sanzidur Rahman & Chidiebere Daniel Chima, 2016. "Determinants of Food Crop Diversity and Profitability in Southeastern Nigeria: A Multivariate Tobit Approach," Agriculture, MDPI, vol. 6(2), pages 1-14, April.
    3. Olukunle Samuel Olaniran & Olusola Olakunle Ogunjinmi, 2022. "Modelling the Impacts of Agricultural Outputs and its Components on Human Mortality Rate in Nigeria," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 11(1), pages 146-160, January.
    4. Osemenam Uche & Afeni Thomas B., 2019. "The Likelihood of Sustaining Nigerias Iron Ore Production in the Short-Run," International Journal of Social and Administrative Sciences, Asian Economic and Social Society, vol. 4(2), pages 200-212, June.
    5. Rahman, Sanzidur & Daniel Chima, Chidiebere, 2015. "Determinants of modern technology adoption in multiple food crops in Nigeria: a multivariate probit approach," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 4(3), April.
    6. Sanzidur Rahman & Chidiebere Daniel Chima, 2018. "Determinants of Pesticide Use in Food Crop Production in Southeastern Nigeria," Agriculture, MDPI, vol. 8(3), pages 1-14, February.

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