Exploring The Gross Domestic Product Contribution of Agriculture and Natural Resource-Based The Activities Sector in Nigeria

Abstract

This study explored the contribution of the agricultural sector, which included agriculture and natural resource-based activities, to Nigeria’s GDP. The data used in the study were secondary data obtained from the 2023 Central Bank of ‎Nigeria (CBN) statistical bulletin, for the period of 1981 to 2023. Multiple linear regression analysis and Z-test for two ‎population equality means were employed in this study. From the graphical representation, it was evident that different ‎sectors contributed varying proportions to Nigeria’s GDP. It was revealed that the services sector, as one of the key ‎sectors of Nigeria's economy, contributed the highest share of 49.50% to GDP, the industrial sector contributed 27.47%, ‎while the agricultural sector contributed 23.07% over the study period. In establishing the relationship between Nigeria’s ‎economy and agriculture and natural resource-based activities, the results demonstrated that farming-related activities ‎had a positive relationship with Nigerian GDP, whereas natural resource-based activities had a negative relationship with ‎Nigerian GDP over the study period. Also, the results indicated that all the independent variables used in the study were ‎statistically significant with Nigeria’s GDP (p<0.05). The model used was a good fit for the dataset, with an R-squared ‎value of 0.9930, indicating that 99.30% of the variability in agriculture and natural resource-based activities was ‎explained by the model. The remaining 0.70% was attributed to factors not included in the study. In addition, the ‎graphical display for the agricultural sector’s contribution to Nigeria’s GDP showed that farming-related activities ‎accounted for a substantial 95.67% of the sector’s contribution, while natural resource-based activities contributed only ‎‎4.33%. Based on the findings, the regression results (R² = 0.9930 and parameter significance at p < 0.05), along with ‎the Z-test result (p < 0.05), indicate that the agricultural sector is a relevant driver of Nigeria’s GDP. If the government ‎pays more attention and allocates more resources to the sector, it could significantly boost the country's economic ‎growth. The study recommended that since the agricultural sector contributed only 23.07% to Nigeria’s GDP compared ‎to other sectors and is underperforming, the Federal Government should revamp agricultural policies to support ‎mechanization and improve access to modern technologies, which will enhance the productivity of agricultural activities ‎in the country‎.