Abstract
There has been many significant research efforts that have been devoted to understand the effects of macroeconomic factors on the agriculture in Nigeria. Thus, macroeconomic factors such as exchange rate and crude oil price over the period 1981 to 2016 examined the effects on agricultural export in Nigeria. This paper employed the ARDL bound test analysis since all the macroeconomic series used in the study are of mixed integrated order of stationarity. A Granger causality was also carried out in order to examine whether there is any predictive power of crude oil price for agricultural export. The findings showed that there exists a significant relationship between the agricultural export which is the dependent variable and the exchange rate but not in the case of the crude oil price. It also revealed that the variables do cause each other in some directions. In conclusion, there is long run relationship between exchange rates and agricultural export in Nigeria.
Highlights
Nigeria found crude oil in 1956, it turned into an export product in 1958
Likewise several macroeconomic variables and policies has be linked to sectors output growth on agriculture based on this study reviewed, necessitate investigating of macroeconomic factors influencing agricultural output in Nigeria
Unit Root Test Augmented Dickey Fuller (ADF) and Philips-Perron (PP) test are employed for conducting of the unit root test; for determining the order of integration
Summary
Nigeria found crude oil in 1956, it turned into an export product in 1958. Before the discovery of crude oil, the export products were agricultural commodities. The production level of crude oil in the country has changed throughout the years because of the OPEC’s quota and socio-political instability. Taking after the discovery of crude oil that has being main source of income and foreign exchange for the country, thereby adds to more than 80% of the government’s revenue. The international price of crude oil dwindled in the global market and this prompted to a shock on the foreign exchange rate of the nation. Exchange rate which is the price for which the currency of the nation can be exchange for another nation’s currency depreciated (Mousavi and Leelavathi, 2013; Obioma, 2015)
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