Influence of foreign direct investment and exchange rate on fisheries in Nigeria

Abstract

Many studies have explored the impact of macroeconomic factors on the growth and output of the agricultural sector in Nigeria with focus on the aggregate output. Some studies narrowed down focus on the crop subsector while neglecting the fisheries subsector which is an important source of cheap protein for our increasing population, a source of employment for the unemployed and also key to achieving the first three sustainable development goals 2030. In this study, we investigated the influence of FDI on agriculture and exchange rates on the output of the fisheries subsector using time series data that spans from 1980-2018. A Vector Autoregressive Model was also used alongside a growth model. The findings indicate positive growth in the fisheries subsector. FDI to agriculture and exchange rate movements were both found to affect the fisheries subsector positively in the long run, whereas only FDI to agriculture was found to exert a positive influence in the short run. Policies to attract FDI to the sector are thus advocated for, while macroeconomic policies to stabilise the Nigerian currency (naira) against the US dollar are also advised.