Oil Prices, Agriculture and Industrial Sector Performance in Nigeria

Abstract

This study employed time series data from 1981 to 2024 to
analyse the effects of oil prices and agricultural sector
performance on the industrial sector in Nigeria. The annual time
series data were sourced from the Central Bank of Nigeria
Statistical Bulletin (2024) and the World Bank Development
Indicators (2024). A unique emphasis of this study is the
decomposition of agricultural output into crop production,
livestock, forestry, and fisheries. The researcher utilised a system
of dynamic equation modelling for the analysis. Due to the mixed
order of integration in the time series data, the Autoregressive
Distributed Lag Model (ARDL) was selected as the primary
estimation technique. The findings revealed that increases in oil
prices, crop production, and fishery production positively
influenced Nigeria's industrial output. Conversely, an increase
in foreign direct investment was found to decrease industrial
output, while a rise in the value of the dollar had a positive effect.
The study concluded that agricultural output and practices,
particularly crop and fishery production, are significant drivers
of industrialisation in Nigeria. These sectors serve as the
primary channels through which agricultural productivity
impacts industrial growth. Based on these findings, the study
recommends that the Nigerian government prioritise
agricultural development by promoting the use of machinery in
agricultural production and emphasising crop production as the
main source of food for the population. Such measures could
shift public perception of agriculture and enhance its
contribution to industrialisation.