Impact of Infrastructure on Agricultural Value Chain in Nigeria

Abstract

The agricultural sector was the mainstay of the Nigerian economy not
until the shift of attention to the crude oil sector. It was good that the
country discovered crude oil; it could have been an added advantage to
further the frontier of the agricultural sector by developing the value
chain potential in the country. Though the agricultural sector has
suffered neglect over the years, it remains the largest employer of labour
in the country and it can employ many more if the value chain potential
in the sector is developed. This study, thus, examined the impact of
infrastructure on the agricultural value chain in Nigeria from 1981 to
2019 using Vector Error Correction Methodology. It was found that
electricity infrastructure and public spending on infrastructure did
impact the agricultural value chain over the period analysed. Their
coefficients of 4.71 and 0.33 respectively imply that a 1% increase in
electricity infrastructure and public infrastructure spending brought
about a 4.7% and 0.33% increase in the agricultural value chain
respectively. On the other hand, a 1% increase in telecommunication
infrastructure dropped the agricultural value chain by about 0.01 in the
country over the period studied. However, the negative impact of
telecommunication infrastructure was a week one. Thus, it was
recommended that public infrastructure spending capable of boosting
agricultural value chain be made more effective by plugging leakages.
Also, partnership between the ministry of agriculture and
telecommunication services providers, for development of products that
will boost agricultural value chain in the country is important.