EXTERNAL DEBT AND AGRICULTURAL PRODUCTION IN NIGERIA
The motivation for this paper stems from the rising debt profile of Nigeria, especially the foreign component, and its implication on growth prospects. In that regards, the study sought to establish the linkages between external debt and growth in productivity, specifically focusing on the agricultural sector. The study thus analyzed the relationship between external debt and Nigeria's agricultural production from 2006 to 2021 using secondary data obtained from the Central Bank of Nigeria (CBN) statistical bulletin and the World Development Indicators (WDI). ADF unit root test and the (ARDL) bound testing approach to cointegration were utilized, to achieve the objectives of the study. The parameters displayed a long-term association in both the short and long - run, according to empirical results, which demonstrated that the variables were cointegrated. External debt stock (EDS) and agricultural production, as assessed by agriculture gross domestic product (AGDP), had a substantial positive association, indicating that EDS positively impacted agricultural growth and that higher EDS accelerated agricultural growth over time. To be precise, a rise in EDS of 1% produced an increase in AGDP of 0.14%. Euro bond stock and bilateral loans also revealed positive relationships while External Debt Service Payment and Multilateral loans revealed negative relationships with AGDP. According to this research, the government must consider the strategy of diversifying its economy via agricultural output seriously. To lessen the cost and unfavorable effects of an excessive reliance on foreign exchange from oil and its price volatility, it is necessary to diversify the sources of external debt servicing, particularly in the non-oil sector including agriculture, mining, industry, and industrial production.
Keywords: Debt, Agriculture, Loans, Output, Nigeria.
Copyright (c) 2023 OSUJI, C.C.(Ph.D), EHRIJAKPOR, A.E.O. (FCA, Ph.D), MGBEZE, J. C. (Ph.D Candidacy)
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