Inflation and Agricultural Output in Nigeria: An ARDL Re-examination of Macroeconomic Interactions

Abstract

This study re-examines the impact of inflation on agricultural output in Nigeria (1981–2024), explicitly accounting for interactions with exchange-rate movements, government agricultural expenditure, and interest rates. Using an Autoregressive Distributed Lag (ARDL) approach, we examine both short-run dynamics and long-run equilibrium relationships among natural-log transformed variables. Results indicate a statistically significant negative long-run elasticity of agricultural output with respect to inflation, suggesting inflation raises production costs and reduces farmers’ profitability. Government expenditure positively influences output, while exchange rate fluctuations have mixed impacts depending on the lag period. Rising interest rates consistently constrain productivity by limiting access to credit. The findings underscore the importance of inflation control, exchange rate stabilization, targeted government investment, and affordable credit in promoting sustainable agricultural output. This study contributes updated empirical evidence to the literature and offers policy recommendations to enhance agricultural production and support economic growth