Institutional Voids and Employment in Nigerian Agriculture

Abstract

Governance has always been an issue in the economies of the Less Developed Countries (LDCs) of the world, and Nigeria is not an exception. The economy of Nigeria is managed through Ministries, Departments and Agencies (MDAs) delineated along sectoral lines. The agricultural sector is governed by the Federal Ministry of Agriculture and Rural Development that is responsible for formulating government polices to stimulate agricultural finance, production, storage, processing, value chain development and marketing. These polices are, in turn, expected to stimulate new investments, job creation, and employment in the sector. Time series secondary data covering 1981 to 2014 on the rebased Gross Domestic Product (GDP) and sectoral Gross Value Added (GVA) at 2010 constant basic prices, employment, wage rate, inflation rate and interest rate were collected from the National Bureau of Statistics and the Central Bank of Nigeria on the agricultural sector. The variables were collated and summarised into a table of data. The unit root test was carried out to test for stationarity of variables. Sectoral employment elasticities of growth were measured using Vector Error Correction Model (VECM) regression.  Data was analysed using descriptive statistics and VECM at α_0.05. Agriculture sectoral elasticity of employment was -0.02, but it was not significant. Key informants in agricultural policy and agricultural value chains were then interviewed to determine why the job absorptive capacity of the agricultural sector was unexpectedly low, and the result, summarized with Khanna’s Five-Context Model, pointed to institutional voids in the sector that must be addressed before the full employment generating potentials of the agricultural sector may be realised.

Keywords: Economic growth, Employment elasticity, Gross Value Added, Agricultural Sector, Institutional Voids.

DOI: 10.7176/JESD/12-14-12

Publication date:July 31^st 2021