Trends and Determinants of Foreign Direct and Domestic Private Investment in Nigeria’s Agriculture (1981-2000)
- September 10, 2020
- Posted by: RSIS Team
- Categories: Agriculture, IJRIAS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume V, Issue IV, April 2020 | ISSN 2454–6186
Ogebe, F. O1*; Abah Daniel1 and Burbwa, P. A.2
1Senior Lecturers, Department of Agricultural Economics, Federal University of Agriculture, PMB 2373, Makurdi, Benue State, Nigeria
2Assistant Lecturer, Department of Agricultural Economics, Federal University of Agriculture, PMB 2373, Makurdi, Benue State, Nigeria
*Corresponding Author
Abstract:- The process of economic transformation and development calls for the participation of all interest groups in the economy hence this study set out to assess trends in domestic and foreign direct investments in Nigerian agriculture sector. The research utilized time series data which were obtain from CBN and other International agencies. Stationarity test (ADF) was carries out to examine the time series characteristics of the data. The unit root test indicated that the variables are integrated of the order 1(1). This was then tested for co-integration or Error Correction Model (ECM). The results of econometric analysis showed that the dependent variables actually co-integrate with their fundamentals. The study observed that the pattern of domestic and foreign investments in Nigeria tended to be volatile, displaying highly variable growth rates, and high degrees of fluctuation or instability. The study revealed that the pattern of domestic investment in Nigeria was very unstable between 1981 and 2000, but more so for investment in agriculture than for the whole economy. There was, however, a measure of relative stability after 1995 in both aggregate and agricultural sector investment. As regards the annual flow of foreign net private investment, the degree of volatility was even higher than for domestic investment. And again, the agricultural sector recorded a higher degree of volatility than the economy as a whole. The result of the empirical estimate of determinants of investment revealed that public investment (GI), inflation rate (INFR), terms of trade (TOT) and total credit plus foreign revenue (TC) significantly influence domestic private investment. On the other hand, public capital expenditure, growth rate of the economy and inflation rate are the variables that significantly influence foreign direct investment in agriculture in Nigeria. It is recommended that all the policies put in place by the Monetary and Fiscal Authorities to encourage flow of funds to the agricultural sector be sustained. More so, Federal government should overhaul its capital budgetary processes and provision so as to make positive impact in development of the sector.
Keywords: Trends, Investment, Agriculture, Econometric model, Nigeria
