Foreign Direct Investment and Agricultural Exports in Nigeria

The problem of undiversified and unstable export sector in Nigeria has been persistent over the years. In this study, the effect of foreign direct investment (FDI) on agricultural export – a major source of comparative advantage for Nigeria’s export sector – is examined. It is argued that the technical and institutional advantage of FDI inflow should lead to improvement in agricultural export capacity in Nigeria. Using data for the 1981 t0 2022 period and a dynamic framework (based on the autoregressive distributed lag technique), the study finds that FDI inflows has a significant positive impact on agricultural export from Nigeria. There is also evidence that agricultural output does not significantly influence agricultural export in Nigeria. These results suggest that FDI in agriculture may be more targeted at specific areas in the sector that are directly linked to export. Thus, if the benefits of FDI can be spread to all aspects of agriculture in Nigeria, both output and export from the sector are expected to further improve significantly.