The Nexus between Agricultural Development and Employment Generation in Nigeria

Abstract

Despite the fact that the country is blessed with arable lands for competitive and high yielding farming, unemployment still soars, and Nigeria’s inability to fully and sincerely promote agriculture has been cited as the basis for its recent alarming rate of unemployment. This study investigates the role of agricultural development in driving employment generation in Nigeria in an attempt to provide current empirical evidence for Nigeria’s lingering unemployment situation. Based on the Keynesian theory of employment, interest and money, the study estimated a dynamic multivariate autoregressive distributed lag (ARDL) model using Nigeria’s annual time series data for the period 1986 to 2020. The results obtained show that agricultural value addition and government expenditure on agriculture exerts a significant positive effect on employment generation both in the long and short-run while annual growth rate of the population exerts a significant positive effect on employment generation in the short-run in Nigeria. Nevertheless, human capital development and lending rate had a positive and insignificant effect on employment generation in the short-run. Furthermore, the causality results showed that a bi-directional causality existed between the selected agricultural development indices such as agricultural value addition, government expenditure on agriculture, gross fixed capital formation, annual growth rate of the population and employment generation. The study therefore recommends that the Nigerian government should embark on massive investment in agriculture as this builds an end-to-end integrated agriculture value chain which invariably boosts production and as such creates decent job which in turn, ends poverty in the long-run.