Capital Accumulation in Agriculture and Agricultural Output Growth in Nigeria: 1993-2024

This study investigates the relative effects of capital accumulation in agriculture and agricultural output growth in Nigeria using annual time-series data covering the period 1993–2024. The specific objectives were to examine the factors which influence capital accumulation in the agricultural sector in Nigeria, measure the relative effects of capital accumulation and financial inclusion on the growth of agricultural output in Nigeria. Robust regression techniques with heteroskedasticity and autocorrelation consistent (HAC/Newey–West) standard errors were employed, while standardized coefficients were used to assess the relative importance of the explanatory variables. Diagnostic tests confirm the reliability of the estimated models: the Breusch–Pagan test shows no evidence of heteroskedasticity (LM = 3.0433, p = 0.5506), the Jarque–Bera test confirms normality of residuals (JB = 0.4083, p = 0.8153), and the Breusch–Godfrey test indicates no serial correlation (LM = 0.1254, p = 0.9392), supported by a Durbin–Watson statistic of 1.7357. Variance Inflation Factor results further suggest acceptable multicollinearity levels. The results indicate that growth in net national savings (g_NNS) has the strongest positive association with agricultural output growth, being statistically significant in Model 2 (β = 0.0230, p = 0.010) and recording the highest standardized coefficient in Model 1 (β = 0.373). Human capital formation growth (g_HCF) shows a positive but weaker effect. In contrast, gross fixed capital formation growth (g_GFCF) and financial inclusion (FII) exhibit negative and statistically insignificant relationships with agricultural output. Overall, the findings suggest that domestic savings and human capital formation are more effective drivers of agricultural growth in Nigeria than aggregate investment and broad financial inclusion measures. The study recommends rural savings schemes, increased investment in farmer education, and addressing structural bottlenecks in Agricultural Financing.