The Impact of Financial Sector Reforms on the Nigerian Agricultural Export Performance

Abstract

The performance of the export subsector is one of the vital indices in measuring the impact and successes of several financial reform programmes carried out in Nigeria. Accordingly, the study estimated the effect of financial sector reforms on major agricultural exports in Nigeria from 1970-2009. Secondary data used for the study were analyzed using cointegration and error correction model (ECM). The empirical results disclosed that financial sector reforms significantly affect major agricultural export commodities such as cocoa, palm kernel and palm oil in Nigeria both in the long and short-run. Chow test result showed significant difference between agricultural exports (cocoa and palm oil except palm kernel) function in the pre-financial sector reforms and during the financial sector reforms period. The study advocated for the provision of appropriate promotion incentive and production such as abolishing of export prohibition, establishment of export development funds and researches into producing disease resistance, early maturing and high yielding varieties that will enhance the production of high agricultural yielding crops meant for export. Also, institutional framework that will boost disbursement of funds to cash crops sub-sector in the country needs to be strengthened. Lastly, policies that would reduce interest rate should be formulated.