Impact of Macroeconomic Policy on Agricultural Growth in Nigeria

Abstract

The impact of macroeconomic policy on agricultural growth in Nigeria was estimated using time-series data and econometric analysis. Our results show that Gross Domestic Product (GDP), Credit Loan to Agriculture (CLA) and exchange rates are significant with positive influences. Income elasticity of agricultural growth was low at 0.939 percent indicating the income inelastic nature of agricultural commodities. There is a positive relationship between the dependent variable (Agricultural Output) and the independent variable (GDP). On the other hand, money supply has an inverse relationship (negative influence) on agricultural production which is contrary to expectations. The interest rate is positive but insignificant which can be explained by the restrictive monetary policies. Equally, a restrictive monetary policy can cause farm incomes to fall.