Does Monetary Policy matter for Agricultural Sector Performance? Empirical Evidence from Nigeria

Victor Ugbem Oboh, Moses Kpughur Tule, Godday Uwawunkonye Ebuh


The paper examined the impact of monetary policy on agricultural sector performance in Nigeria, using annual data spanning the period 1981 to 2016. Given its significant role in providing employment to about 60 % of the economically active population and 70% of the country’s poorest communities, agriculture has huge potential for achieving poverty reduction in Nigeria. In this regard, the study employed the Autoregressive-Distributed Lag (ARDL) approach and established a long- run relationship between agriculture value added and some monetary policy variables. Specifically, the findings suggested that in the long-run, money supply and maximum lending rate have significant effects on agriculture value added while exchange rate and inflation do not. Given the important role of money supply in promoting agricultural sector performance, the paper recommends an expansionary but non-inflationary monetary policy to improve value addition to the agricultural sector of the Nigerian economy.

Keywords: Agricultural Value Added, Monetary Policy, ARDL approach, Nigeria.

DOI: 10.7176/JESD/10-12-05

Publication date:June 30th 2019


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