Analysis of Agro Export Response to Macroeconomic Indices in Nigeria (1980 – 2014)

Abstract

The study examined the relationship between agricultural output and macro-economic variables in Nigeria between 1981– 2014. The data series employed were gathered from the Central Bank of Nigeria, Statistical Bulletin, Economic and Financial Review, Monthly and Annual Reports and Statement of Account for various years, National Bureau of Statistics and Publications of International Monetary Fund. The study employed the Multivariate co-integration methods. The time series property of data employed were first to be investigated. This is then followed by testing for co-integration which appeared in the model. Based on the time series property of data used, the results clearly indicated that there were at most, two co-integrating vectors and this was further confirmed by the maximum Eigen Value which showed two co-integrating vectors. This showed that there was a stable long run relationship between agricultural output and macroeconomic variables during the study period. The coefficients of the long run relationship were then deductively along the general to specific approach. The vector error correction model was adopted to know the short-run relationship between the dependent and explanatory variables. The result showed that the contribution of Agricultural output to Gross Domestic Product was very high from the first quarter up to 6th quarter and then starts declining after the 7th quarter. It is now recommended that there is an urgent need to enhance the production of both domestically consumed and exported crops in Nigeria and that a policy should be initiated to discourage importation of Agricultural output to Nigeria.