FOREIGN DIRECT INVESTMENT AND AGRICULTURAL SECTOR PERFORMANCE IN NIGERIA: A DISAGGREGATED APPROACH

AMALACHUKWU CHIJINDU ANANWUDE; CHARLES EMEKA NWOBIA; PAUL KENECHUKWU ONYEGIRI

doi:10.22159/ijss.2025v13i5.55884

Authors

AMALACHUKWU CHIJINDU ANANWUDE Department of Banking and Finance, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria
CHARLES EMEKA NWOBIA David Umahi Federal University of Health Sciences, Ebonyi State, Nigeria.
PAUL KENECHUKWU ONYEGIRI Fidelity Bank Plc, Lafia, Nasarawa State, Nigeria.

DOI:

https://doi.org/10.22159/ijss.2025v13i5.55884

Keywords:

foreign direct investment, Crop production, Livestock, Forestry, Fishery

Abstract

The study examined the effect of foreign direct investment (FDI) on agricultural sector performance in Nigeria. The specific objective was to determine the extent to which FDI affects crop production, livestock, forestry, and fishery real output. This study utilized an ex-post facto research design. Secondary data were obtained from the Central Bank of Nigeria from 1986 to 2023. The time series data were analyzed using the Ordinary Least Squares regression technique. The findings revealed that FDI has a significant (0.0002 < 0.05) positive effect on crop production; a significant (0.0004 < 0.05) positive effect on livestock; a significant (0.0044 < 0.05) positive effect on forestry; and a significant (0.0010 < 0.05) positive effect on fishery real output in Nigeria. The study concludes that FDI is a panacea for agricultural sector performance in Nigeria. It will be an innovative approach if the Federal Ministry of Agriculture and Rural Development actively seeks and attracts more FDI by creating favorable policies and incentives for foreign investors to continue enhancing crop production in Nigeria. The Nigerian Investment Promotion Commission should collaborate with international agribusiness firms to introduce more advanced livestock farming technologies and practices to further boost livestock output.

References

Adeagbo, K. A., & Jimoh, O. R. (2023). Impact of foreign direct investment on agricultural and manufacturing output in Nigeria. International Journal of Business Economics and Management Science, 2(2), 15-30.

Agba, D. Z., Adewara, S. O., Nwanji, T. I., Yusuf, M., & Adzer, K. T. (2018). Does foreign direct investments impact agricultural output in Nigeria? An error correction modelling approach. Journal of Economics and Sustainable Development, 9(4), 67-77.

Agba, M. S., Agba, A. O., Ushie, E. M., & Akwara, A. F. (2009). Poverty, food insecurity and the rebranding question in Nigeria. Canadian Social Sciences, 5(6), 1-9.

Akano, O. I., Oderinde, F. O. & Omotayo, A. O. (2023). Agricultural yield, food nutrition and dietary energy supply in Nigeria: Evidence from nationally representative data. Journal of Agriculture and Food Research, 11(3), 1-16.

Akinwale, S. O., Adekunle, E. O., & Obagunwa, T. B. (2018). Foreign direct investment inflow and agricultural sector productivity in Nigeria. Journal of Economics and Finance, 9(4), 12-19.

Azri, A. H., Rashid, I. M. A., Shafiai, S., Rawabdeh, M., Esquivias, M. A., Faisal, S. I., & Hamzah, H. (2023). The effect of foreign direct investment in the agriculture sector on economic growth in selected African countries. In: AIP conference proceedings, American Institute of Physics Incorporation.

Bello, M. M., Yahaya, J. U., & Adamu, I. (2024). An analysis of sustainable agricultural productivity and food security in Nigeria. Journal of Political Discourse, 21(2), 45-60.

Dare, E. A. (2020). Impact of international foreign aids development on agriculture in Kogi State Nigeria. International Journal of Scientific Research in Educational Studies and Social Development, 4(1), 47-65.

Edewor, S. E., Dipeolu, A. O., Ashaolu, O. F., Akinbode, S. O., Ogbe, A. O., Edewor, A. O., & Oladeji, S. O. (2017). Contribution of foreign direct investment to agricultural productivity in Nigeria. In 2017 annual NAAE conference, Abeokuta, Nigeria.

Elmi, M. A. A. (2023). The effect of foreign direct investment on agriculture production in Djibouti (Master’s thesis, İstanbul Gelişim Üniversitesi Lisansüstü Eğitim Enstitüsü).

Fwah, F. H., Abu, O., & Aye, G. C. (2017). Long-run and short-run effects of foreign trade and foreign direct investment on agricultural productivity in Nigeria. Asian Journal of Economics, Business and Accounting, 3(3), 1-8.

Gavrilova, N. G. (2020). Challenges and opportunities in Nigeria’s agricultural sector. European Proceedings of Social and Behavioural Sciences, 113, 556-562.

Gunasekera, D., Cai, Y., & Newth, D. (2015). Effects of foreign direct investment in African agriculture. China Agricultural Economic Review, 7(2), 167-184.

Han, Y., Smith, R. B., & Wu, L. (2024). The impacts of foreign direct investment on total factor productivity: An empirical study of agricultural enterprises. China Agricultural Economic Review, 16(1), 20-37.

Hussain, N. (2016). Impact of foreign aid to agriculture sector on agricultural productivity in developing countries in the context of second goal of SDGs (Doctoral dissertation, KDI School).

Iddrisu, A. A., Immurana, M., & Halidu, B. O. (2015). The impact of foreign direct investment (FDI) on the performance of the agricultural sector in Ghana. International Journal of Academic Research in Business and Social Sciences 5(7), 240-259.

Kastratović, R. (2024). The impact of foreign direct investment on agricultural exports: The evidence from developing countries. The Journal of International Trade and Economic Development, 33(2), 276-293.

Martin-Odoom, K. (2021). The effect of foreign direct investment on agricultural growth in Ghana (Doctoral dissertation, University of Ghana).

Nur, A. M. (2022). The effect of foreign direct investment on agricultural output in Somalia: An application of ARDL model (Doctoral dissertation, University of Nairobi).

Ogbanje, E. C., & Salami, A. O. (2022). Impact of foreign direct investment on Nigeria’s agricultural sector (1981 to 2019). International Journal of Environment, Agriculture and Biotechnology, 7(4), 161-171.

Owutuamor, Z. B., & Arene, C. J. (2018). The impact of foreign direct investment (FDI) on agricultural growth in Nigeria (1979-2014). Review of Agricultural and Applied Economics, 21(1), 40-54.

Ozawa, T., & Castello, S. (2003). FDI and endogenous growth: IB perspectives. International business and the eclectic paradigm: Developing the OLI framework (pp. 4-90). London: Routledge.

Rahman, M. C., Rahaman, M. S., Sarkar, M. A. R. & Islam, M. A. (2024). Foreign direct investment and agricultural output nexus in Bangladesh: An autoregressive distributed lag approach. Journal of Agriculture and Food Research, 15(3), 1-9.

Renault, M. (2024). Endogenous growth theories and Solow’s revival in modern economics. In Conference on the history of endogenous growthoberts, M., & Setterfield, M. (2007). What is endogenous growth theory. Economic Growth: New Directions in Theory and Policy, Cheltenham, Edward Elgar (pp. 14-31). Cheltenham, UK: Edward Elgar.

Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002-1037.

Sultana, Z., & Sadekin, M. N. (2023). The impact of FDI on the agriculture sector: A case study from Bangladesh. Heliyon, 9(12), 1-9.

Ubom, A. U. (2016). Distribution effects of foreign direct investment on the performance of the Nigerian economy from 1970 to 2013. Global Journal of Management and Business Research, 16(C3), 19-29.

Umar, Z. (2024). Harnessing innovation in agriculture: Driving productivity and food security in Nigeria. International Journal of Financial Research and Management Science, 4(7), 97-104.

Yusuf, K. U. (2015). The impact of foreign direct investment agricultural output in Nigeria (Doctoral dissertation, Universiti Utara Malaysia).

Yusuff, M. A., Afolayan, O. T., & Adamu, A. M. (2016). Analysis of foreign direct investment on agricultural sector and its contribution to GDP in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 7(2), 94-100.