ISSN – PRINT:2756-4495 | ONLINE: 2756-4487

Volume 05, Issue 02 – 2025

Trade Policy and Agricultural Sector Output Growth in Nigeria

Lucky, I. Amabuike1, Kenneth, Jegbefumwen2, Akah, Duncan Nyebuchi3 Cynthia, O. Isiwu4

1&4Department of Economics Education, Federal College Education, Ofeme-Uhuhu, Umuahia,

2Department of Economics, Novena University, Ogume, Delta State.

3Department of Economics, University of Port Harcourt, Port Harcourt.

ABSTRACT

The persistent drive of governments to achieve stable and sustained economic growth—particularly through the expansion of real sector activities—continues to place considerable pressure on policymakers to formulate and implement effective strategies that enhance productivity. This study investigates the impact of trade policy on agricultural sector output in Nigeria, using annual data from 1985 to 2024 obtained from the Central Bank of Nigeria (CBN, 2025), the National Bureau of Statistics (NBS, 2024), and the World Development Indicators (WDI, 2021). Employing the Autoregressive Distributed Lag (ARDL) technique, the empirical results reveal that the degree of trade openness exerts a positive but statistically insignificant effect on agricultural output in both the short and long run. Tariffs, however, show a positive and significant influence on agricultural output across both periods. Foreign direct investment (FDI) was found to have a positive and significant short-run effect but turned negative and significant in the long run. The exchange rate displayed a negative but significant impact in the short run, while its long-run effect was positive and significant. Inflation, on the other hand, exerted a negative and insignificant influence throughout. Based on these findings, it is recommended that the government maintain moderate tariffs on agricultural imports to limit excessive foreign competition and strengthen domestic production. Additionally, policies should be developed to attract more foreign investors into the agricultural value chain through incentives such as tax holidays, simplified investment procedures, land access facilitation, and profit repatriation guarantees. Finally, ensuring exchange rate stability and curbing inflation through coordinated monetary and fiscal policies would help sustain agricultural growth and overall economic stability.

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