Macroeconomic Drivers of Agricultural Productivity and Food Security in Nigeria: An Empirical Analysis

Abstract

This study examined the macroeconomic drivers of agricultural productivity and food security in Nigeria from 1980 to 2020, with a comparative assessment of the military era (1980-1998), democratic era (1999-2020), and the combined period. The analysis focused on selected macroeconomic variables, including government expenditure on agriculture, exchange rate, inflation, interest rate, agricultural credit, agricultural taxation, trade openness, and agricultural foreign direct investment. Secondary time-series data were obtained from the Central Bank of Nigeria, Food and Agriculture Organization, National Bureau of Statistics, and World Bank databases. Descriptive statistics, two-stage least squares estimation, cointegration analysis, and a vector error correction model were used to examine the relationships among macroeconomic variables, agricultural productivity, and food security across the three periods. The two-stage least squares results showed that agricultural productivity had a positive effect on food security across the military, democratic, and combined periods. Exchange rate depreciation had a negative effect on food security, while agricultural foreign direct investment had a positive influence. Government expenditure on agriculture and agricultural credit supported agricultural productivity, although the magnitude and significance of their effects varied across periods. The vector error correction model results indicated long-run equilibrium relationships among food security, agricultural productivity, and selected macroeconomic variables. The estimated adjustment coefficients suggested that deviations from long-run equilibrium were corrected at different speeds across the military, democratic, and combined periods. Overall, the findings indicate that agricultural productivity, macroeconomic stability, agricultural investment, exchange rate management, inflation control, and access to agricultural finance are important for improving food security in Nigeria. The study recommends strengthening domestic agricultural production, improving access to agricultural credit, and supporting stable macroeconomic conditions to enhance productivity and food security.