EFFECT OF NIGERIAN MACRO-ECONOMIC AND MACRO-ENVIRONMENT RELATED FACTORS ON AGRIBUSINESS OUTPUT (1970 -2007)

Abstract

The study examined the effect of Nigeria macro-environment related factors on agribusiness output between 1978 and 2007. The study was conducted with a view of evaluating the macro environment policies adopted in Nigeria and the effect on agribusiness output. Secondary data used for this study covered a period of 24 years and this was sourced from Central Bank Statistical Bulletin. The tools of data analyses were descriptive statistics, involving tables, frequency and percentages. Also, Ordinary Least Square multiple regression analysis was used to analyse the relationship between some relevant macro-environment and macroeconomic factors with agribusiness output over the years. A trend analysis was carried out to know the impact of the macroeconomic policies on agribusiness output over the years. The study revealed that all the policy instruments were useful and had a significant impact on agribusiness output at varying rate of changes of their application. The multiple regression result showed that nominal interest rate, price uncertainty and Government investment (debt) had a negative relationship with agribusiness output at 1%, 1% and 10% probability levels respectively. On the other hand Government expenditure and Foreign Private Investment have a positive relationship with agribusiness output and were statistically significant at 1% risk level respectively and this conveyed that as government expenditure and foreign private investment increases, the agribusiness output will also increase. This study showed that agribusiness output depended more on macroeconomic related factors than political environment. . Also, policy statements on price stability should be streamlined for stable price and better implementation via appropriate institutions. Thus, policies reducing nominal interest rate should be encouraged. Also, based on the findings, there is need to increase expenditures on agribusinesses through well fashioned macroeconomic policies.

Key word: Macroeconomic, Environment, Policies, Agribusiness, Output