Macroeconomic Variables and Nigerian Agricultural Sector Development

Abstract

The study investigated the impact of some macroeconomic variables like exchange rate and inflation on the development of the Nigerian agricultural industry. Annual time series secondary data covering a period of 33 years (1986- 2020) was utilized in the study while the Ordinary Least Square (OLS) was the estimation technique used to analyze the data. Findings revealed that the exchange rate was positively significant in impacting the dependent variable while the inflation rate was negatively significant. The interest rate was insignificant in impacting the agricultural sector. From the findings, one recommendation arrived at was that the monetary authorities should make policies that would reduce inflation, for example, reduction of the money supply. Reduced inflation would positively impact the development of the agricultural sector as it would boost and increase the consumption of agricultural products.