Food Price Inflation and Agricultural Sector Performance in Nigeria

Food price inflation is a very important macroeconomic variable because everyone in the economy is affected by the experience of a shock. Of particular importance therefore is the effect of food price inflation on the Nigerian agricultural sector. The study hinges on the endogenous growth theory, which emphasizes the need for an economy to grow from within. Data was sourced from Ha, et al. (2021) and World Development Indicators (2025). This study ascertained the nature and strength of the link between food price inflation and the Nigerian agricultural sector output and exports. Correlation analysis and the autoregressive distributed lag were used to analyze time series data from 1981 to 2025. The study found that food price inflation adversely affected agricultural output while credit to the private sector during the preceding year spurred agricultural output in the current year. However, the study also found that credit to the private sector was too low to sustain increased agricultural output in the long run. Also, current-year capital was found to be key to agricultural exports both in the short run and long run. So, the study concluded that financial credit to farmers spurs agricultural exports. Therefore, the study recommends that agricultural marketing boards be reintroduced to suppress the rising cost of agricultural produce and that the government should subsidize the cost of transportation of agricultural produce to the market. In addition, monetary policies should be directed at making more credits available to farmers and mechanized farming should be encouraged by the Nigerian government. This study contributes to the literature by revealing the negative effect of food price inflation on output and the need for an increase in the financial support of the Nigerian government for agriculture.