Response of vegetable oil production to monetary policy in Nigeria

Abstract

Monetary policy is one of the macroeconomic variables that control economy. This is why the study evaluated the response of vegetable oil production to mone- tary policy in Nigeria. Annual time series that spanned for 39 years were obtained from the database of Central Bank of Nigeria and Food and Agriculture Organisa- tion. Data obtained were analysed using descriptive statistics, quadratic trend model and ARDL model. The result indicated that the coefficient of beta 2 (B2) for vegetable oil production (9.15E-05) is positively signed at P-value > 0.1. The implication is that vegetable oil production in Nigeria experienced stagnated growth. The result showed that monetary policy determinants such as inflation rate and broad money supply made significant negative impact on vegetable oil production in Nigeria. Therefore the study strongly recommended that the mone- tary authorities should make available commercial loan for industries involved in the production of vegetable oil at the single-digit prime lending rate to encourage them to grow and expand their vegetable oil agribusiness.