Analyzing the Evolving Relationships among Climate Change, Insecurity, and Food Price Inflation in Nigeria: NARDL Approach

Abstract

The dynamics, scale, and direction of mediating relationships between climate change shocks, Insecurity and food price inflation has recently caught the attention of researchers and has become a subject of intense debate. Yet, studies differ on the type, scale, and evidence of the relationship between climate change shock, insecurity, and food price inflation. Thus, this study empirically investigates the affiliation between insecurity, climate change shocks and food price inflation in Nigeria. To achieve this objective, we adopted both Linear and Nonlinear Autoregressive Distributed Lag approach of cointegration analysis, with time series data spanning 2011M1-2022M12. The results show very strong evidence of a cointegrating relationships between insecurity, climate change shock and food price inflation in Nigeria. Both the ARDL and NARDL bound tests show that the variables of interest have symmetric and asymmetric long run relationships. We found that insecurity and climate change shock are significant determinant of heightened food prices in Nigeria within the study period. The Dynamic Multiplier graph with its accompanying 95 percent confidence interval for statistical inferences indicate that explanatory variables exert significant influence on the food price inflation in Nigeria. This study, therefore, recommends policy interventions to support households adversely impacted by insecurity in the affected zones. Also, the Nigerian state is encouraged to transit from traditional agricultural system to Climate-Smart Agriculture to meet future needs and climate related challenges.