Impact of FDI to Manufacturing Industry on Agricultural Production in Nigeria

Sajo Sani Alhaji; Amade Peter

doi:10.56201/ijefm.v10.no1.2025.pg1.13

📄 Download Paper

Impact of FDI to Manufacturing Industry on Agricultural Production in Nigeria

Sajo Sani Alhaji, Amade Peter

Abstract

This study examines the impact of foreign direct investment (FDI) in Nigeria's manufacturing sector on agricultural production, using data from 1981 to 2023. Agricultural production, measured by value-added activities like forestry, fishing, crop cultivation, and livestock, was the dependent variable, while independent variables included manufacturing sector FDI, legal institutions, exchange rates, and inflation. Unit root tests (ADF and Phillips-Perron) and the ARDL model were used for analysis. Results showed that manufacturing sector FDI had a positive but insignificant short-run effect on agricultural production, becoming significant in the long run. Legal institutions positively influenced agriculture in both the short and long term, while exchange rates and inflation negatively impacted agriculture in the short run. Key recommendations included reducing the cost of imported agricultural inputs, creating a favorable environment for manufacturing sector FDI through incentives and infrastructure improvements, securing land tenure, protecting investor rights, and increasing investments in agricultural development through improved access to credit, modern techniques, and infrastructure.

Keywords

Manufacturing industryLegal institutionAgricultural production and Exchange rate

References

Adeagbo, K. A., & Jimoh, O. R. (2023). Foreign Direct Investment (FDI) on Agricultural and manufacturing output in Nigeria, International Journal of Business Economics & Management Science (IJBEMS), 2(2), 11-28. Ayanwale, A. B. (2007). FDI and Economic Growth: Evidence from Nigeria, AERC Paper 165, African Economic Research Consortium, Nairobi. Edeh, C. E., Ogbodo, J. C. & Onyekwelu, U. L. (2020). Impact of government expenditure on agriculture on agricultural sector output in Nigeria (1981-2018). International Journal of Research and Innovation in Social Science, 4(10), 68 - 80. Edeh, C. E., Ogbodo, J. C. & Onyekwelu, U. L. (2020). Impact of government expenditure on agriculture on agricultural sector output in Nigeria (1981-2018). International Journal of Research and Innovation in Social Science, 4(10), 1-14. Ifeanyi, M. (2022). Conceptual Exploration of Foreign Direct Investment Inflow towards Improving Food Production in Nigeria, Journal of Accounting and Management,12(2), 25-41. International Finance Corporations- IFC, (2023). Role of the private sector in development. A joint report of 31 multilateral and bilateral development finance institutions. Retrieved on July 14, 2024 from http://www.edfi.be/component/ downloads/downloads/54.html. Marius, I. (2019). Foreign Direct Investment and Performance of Manufacturing Sector in Nigeria: any Link to Agricultural Production? Saudi Journal of Business and Management Studies, 4(1), 56-61. Msuya, E. (2007). The Impact of Foreign Direct Investment on Agricultural Productivity and Poverty Reduction in Tanzania. MPRA Paper No. 3671, http://mpra.ub.uni muenchen.de/3671/ Nigeria Investment Promotion Council - NIPC (2022). Investor’s guide to Nigeria, priority areas of industrial investment: Opportunities by Sector, Agriculture: http://www.nipc.gov.ng//opportunities.html Obi-Nwosu, V.O., Ogbonna, K. S. & Ibenta, N. S. (2017). Foreign direct investment inflow and manufacturing Capacity in Nigeria: Zik Journal of Multidisciplinary Research 2, 31-45 Organisation for Economic and Cooperative Development-OECD. (2017). OECD Benchmark Definition of Foreign Direct Investment: Fourth Edition. Osabohien, R., Oluwalayomi, D.A., Itua, O. Q. & Elomien, E. (2020). Foreign direct investment inflow and employment in Nigeria. Investment Management & Financial Innovations, 17(1), 77-89 Sajo, S.A., & Suleiman, P.G, (2023). Impact of domestic investments on agricultural production in Nigeria, International Journal of Innovative Science and Research Technology (IJISRT), 8(12) 1-16. Seriki, A. (2022, September 13), 45th regular meeting of the national council on agriculture and rural development. Thisdaylive. Retrieved December 9, 2022, from: https://www.thisdaylive.com Udoh, E. J. (2011). Estimation of loan default among beneficiaries of a state government owned agricultural loan scheme, Nigeria. Journal of Central European Agriculture, 9(2), 1-15. World Development Indicators (2021). World Bank’s Database. Retrieved from https://databank.worldbank.org/source/world-development-indicators.

Impact of FDI to Manufacturing Industry on Agricultural Production in Nigeria

Abstract

Keywords

References

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT