Do Agricultural Sub-Sectors Predict Industrial Capacity Utilisation in Nigeria? Evidence From a Dolado-Luetkepohl Augmented Var, 1990-2024

This article examines whether agricultural sub-sector outputs predict industrial capacity utilisation in Nigeria over the period 1990-2024. The study is motivated by the persistent policy concern that agricultural expansion in Nigeria has not been fully converted into agro-processing, value addition and manufacturing capacity use. Industrial sector development is proxied by industrial capacity utilisation, while agricultural output is disaggregated into crop, livestock, forestry and fishery production. Because the Augmented Dickey-Fuller results show a mixture of I(1) and I(2) variables, the article adopts the Dolado-Luetkepohl augmented VAR framework rather than ARDL, FMOLS or DOLS. The empirical results show that none of the four agricultural sub-sector outputs individually Granger-causes industrial capacity utilisation at the 5 per cent level, and the joint Wald test is also insignificant. The findings imply that Nigeria’s agriculture-industry problem is less an output-volume problem than a weak-linkage problem involving agro-processing, storage, transport, cold-chain systems, finance, power supply and value-chain coordination. The study contributes by combining disaggregated agricultural output, a method suitable for mixed integration orders, and updated policy evidence on agricultural value-chain reforms in Nigeria. Policy should therefore prioritise agro-industrial processing zones, livestock value-chain transformation, sustainable forestry, fishery cold chains and financing mechanisms that convert primary agricultural output into industrial inputs and finished products