Analyzing sectoral performance and economic growth in Nigeria: evidence from agriculture and manufacturing sectors, 1981–2025

Agriculture and manufacturing are widely recognised as important sectors, however empirical evidence on their dynamic relationship to Nigeria’s economic growth remains inconclusive. Thus, present study extends existing literature on Nigeria by examining long-run relationship and dynamic interactions among agriculture, manufacturing and economic growth over 1981–2025. Annual data from WDI are log-transformed and examined using conventional and break-point unit-root tests, followed by Johansen cointegration and Vector Error Correction Model (VECM). Dummies are included for identified break episodes. The result indicates one cointegrating equation. Agriculture has a positive & statistically significant long-run association with GDP, whereas manufacturing does not. The GDP error-correction coefficient shows 37.6% of short-run disequilibrium corrected within year. Impulse response analysis records positive response of GDP to agricultural innovation, increasing from 0.007279 in first to 0.020302 in tenth period. Alternative Cholesky orderings yield similar long-horizon responses. Forecast error variance decomposition shows agricultural innovations account for 5.16% of GDP forecast-error variance, rising to 60.66% by tenth period, while manufacturing share declines. Diagnostic tests indicate no serial correlation or heteroskedasticity, and inverse-root results support model stability. Overall, findings highlight agriculture’s stronger long-run association with economic activity and importance of productivity improvements and stronger agriculture–manufacturing linkages for Nigeria’s structural transformation. This paper examined the intricate role of agricultural and manufacturing production on Nigeria’s economic growth over the period 1981–2025. The study extends the existing structural transformation literature on Nigeria economy by integrating long-run, short-run, and dynamic analysis within a unified econometric framework. The study revealed agriculture’s prominent long-run association with economic activity and the importance of productivity improvements and stronger agriculture–manufacturing linkages for Nigeria’s structural transformation. Thus, these findings can help policymakers leverage long-term sectoral relationships for more effective economic planning in Nigeria.