DOI: 10.36347/sjebm.2016.v03i11.004

Pages: 611-615

The connection between economic growth and agriculture output is well recognized in the literature, but the causation of the relationship is quite confusing. Understanding the direction of causality between the two variables is good for policy formulation. This study examines the relationship between economic growth and agriculture output from 1970 to 2015. The variables used are real GDP and agriculture output. Engel-Granger causality test was used to test the route of causality between the two variables. The results show a bi-directional causality between them. Given the inevitability of economic recession, this paper recommends programmatic diversification from oil related products to agriculture based production.