Document Type

Occasional Paper

Publication Title

Analysis of Intersectoral Linkages between Agriculture and Industry in Nigeria


This paper uses time series data to analyse the relationship between agricultural growth and industrial performance for the three-decade period 1966 - 1995. Agricultural growth influences industry in many ways. It provides the raw materials needed by industry; it creates direct demand for the output of consumption goods of industries and indirect demand for the output of basic and capital goods industries. Analysing the input-output coefficients, the paper found that most primary and secondary commodity groups have weak backward and forward linkages, while the quantitative relationships between agricultural growth and industrial performance were non-significant, even when lagged. However, the link between industrial growth and the food component of agricultural growth rate emerges positive, as food is expected to play a significant role during the agroindustrial transformation processes. Power generation, as expected, positively influenced industrial performance, while transport infrastructures and capital goods industries have negligible impact as a result of poor performance of these sectors. The policy implications of the analysis include the need to build and expand the capital goods-production capacity of the economy; enhance power generation and distribution, drastic improvement in transport infrastructures, especially roads; research and developmentof local raw materials, including storage/preservation, integrated agroindustrial planning and better investment information management.

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