Impact of Agricultural Output on Economic Growth in Nigeria and Ghana (1985-2014): A Comparative Analysis
Apeh, Ajene S.
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This paper examined comparatively the “impact of agricultural output on economic growth in Nigeria and Ghana”. Nigeria and Ghana have similar economies and the striking similarities are that both countries have agriculture as the mainstay of their economies and have been experiencing a declining contribution of agriculture to GDP. Since both countries have similar economies, it is interesting to know which of the country’s agriculture output contribute more to their GDP and why so that the other will learn from the experience of the other. That constitutes the problem of this study. The main aim of this study was to investigate the impact of agricultural output in stimulating growth in both countries. A model was formulated to give empirical content to the stated hypotheses which were analyzed via the Vector Error Correction (VEC) Mechanism. Data was collected from relevant sources for 30 year period spanning 1985 to 2014. It was collected for variables such as for the agricultural output, industrial output, services output and Real Gross Domestic Product (RGDP). The study showed, the coefficients of the variables in Nigeria as follows; AGO (-1.97), IDO (2.21) and SVO (-1.81) which implies that the contribution of agriculture to GDP is insignificant in accelerating economic growth as compared to other sectors, however, industrial sector perform better in Nigeria than Ghana while in Ghana the coefficients are AGO (2.52), IDO (0.42) and SVO (1.44), which implies that in terms of contribution to GDP, agriculture contributed to Ghana GDP than other sectors followed by service sector. The paper concluded that there exists a significant difference in the impact of agricultural output oneconomic growth in Nigeria and Ghana. The study therefore, recommended amongst others that; first, the government of Nigeria and Ghana should make efforts in increasing the expenditure in the agricultural sector. Secondly, that, given the potential of the agricultural sector, Commercial Banks, Bank of Agriculture and other financial institutions in Nigeria should channel more loans and credit facilities to the sector in order to encourage farmers to increase output through improved seedlings, adequate manure and proper land usage. Finally, policies aimed at increasing the quality of agricultural outputs should be initiated, implemented and used as major tools that would precipitate economic growth in Nigeria and Ghana. More farm implements and inputs should be provided to boost output growth.