Funding for Development: The Role of Foreign Development Agencies in the Performance of Agricultural Sector in Nigeria

Kalizibe Joseph and Christopher Ifeanyi Ezekwe
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Kalizibe Joseph: Federal University, Otuoke, Nigeria.
Christopher Ifeanyi Ezekwe: University of Port Harcourt, Nigeria.

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Abstract: Motivated by the evidence that employment generation across various sectors of the Nigerian economy has remained largely unimpressive despite the increased inflows of foreign aids and grants, this study examined how funding from foreign development agencies comprising International Development Association (IDA), International Fund for Agriculture Development (IFAD) and United States Agency for International Development (USAID) affected the performance of the agricultural sector in Nigeria with a focus on employment generation in agriculture between 1990 and 2019. Time-series data on each of the variables were obtained from the World Development Indicators, International Debt Statistics and ILO statistics. Descriptive statistics, unit root and bounds cointegration tests and ARDL estimation method were applied as techniques for the data analysis. The unit root test results showed that the variables are of mixed integration, thus fulfilling the precondition for the use of the bound test approach to cointegration. It was also found from the bounds cointegration test results that employment in agriculture has a long-run relationship with the funding from the selected foreign development agencies. The estimated ARDL model revealed that funding from IFAD contributed positively to employment in agriculture. This is a pointer that IFAD, as a specialized agency of the United Nations, has remained Nigeria's trusted partner for agriculture development. The results further showed that IDA and USAID funding equally impacted positively on employment in agriculture with IDA funds creating more long-term opportunities for employment in agriculture. Based on the findings, this study recommends that IDA funding should be channelled to Agricultural Development Project (ADPs) and critical infrastructure in the agriculture sector to boost productivity, and in turn, create opportunities for employment in agriculture.

Date: 2021-11-02
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Published in Asian Journal of Economics, Finance and Management , 2021, 3 (1), pp.641-650

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05188180

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