ABSTRACT

Nigeria is a relatively labor intensive economy and the agricultural sector was the backbone of the economy and a great employer of labor. The discovery oil in commercial quantities resulted in the Dutch Disease Syndrome of the agricultural sector. This work examined the impact of agricultural sector development on employment creation and the effect of government expenditure and loans on agricultural sector development. This study made use of two models for the analysis, the first model investigated the relationship between agricultural sector productivity and real gross domestic product as use to represent the level of employment or income in the economy and the second model focused on the effect of government expenditure and loans on agricultural sector development. The main tools of analysis employed are Johansen cointegration test and Parsimonious error correction model. Annual time series data sourced from the Central Bank of Nigeria Statistical Bulletin and World Development Indicators spanning between period 1981 and 2017 were used for the analysis. The result for the first model showed that agricultural sector productivity positively and significantly impacts real gross domestic product. That is to say agricultural sector development is a significant catalyst to employment creation. Similarly, the result of the second model revealed that government expenditure on agriculture and loans are a very good catalyst to agricultural sector development in Nigeria.