Long and Short Run Dynamics of Agricultural and Petroleum Sectors in the Economic Growth of Nigeria

• Published in: Jurnalul economic Vol. XX; no. 64; pp. 13 - 27
• Main Author: Okunola Akinbode Michael
• Format: Journal Article
• Language: English
• Published: Editura ASE Bucuresti 01-06-2017
• Subjects: Agriculture; ARDL; Economy; Growth; Nigeria; Petroleum
• ISSN: 1454-4296; 1454-4296

This study examined the economic relationship among agriculture and petroleum sectors and growth of Nigeria’s economy as well as the effects of these two key sectors on the economic growth. The Bound (ARDL) test which was used to examine the long-run relationship among the variables revealed that there is a long-run relationship among agricultural and petroleum sectors and economic growth. In the short run, both sectors have positive significant relationship with the economic growth. While for every 1% change in agricultural productivity there is about 60.89% change on economic growth, petroleum sector had about 37.07% change effect. Thus, agriculture contributes more than the petroleum sector in the short run. In the long-run, both sectors also have positive relationship with economic growth. Agriculture in the long-run also contribute more than the petroleum sector. While a 1% change in agricultural productivity effects a 53.49% increase in economic growth, petroleum sector increases GDP by 43.71%. However, in the long-run, while agriculture is significant at 5%, petroleum sector is significant at 10%. In conclusion, the positive relationship of both sectors with economic growth shows that they are rather economically complimentary than competitive that the actions and inactions of the government have made them look.