Causality between Agricultural Investments, Inflation and Interest Rates in Nigeria

This study examined the linkages between agricultural investment (comprising Foreign Direct Investment in agriculture, government investment in agriculture and private sector investment in agriculture), inflation rate and interest rate in Nigeria (1981 – 2020). Data for the study were sourced from Central Bank of Nigeria (CBN) and, Food and Agriculture Organization (FAO), and analyzed using Granger causality tests. Results showed that government investment in agriculture (p < 0.05) and private sector investment in agriculture (p < 0.1) has significant uni-directional causality to the level of agricultural foreign direct investment in Nigeria. Also there was uni-directional causality from inflation rate to interest rate (significant at 10%). It was recommended that public and private sectors’ investment in agriculture should be strategic to attract foreign investments in order to boost the productivity of agriculture in Nigeria.