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Time Series Analysis of the Behaviour of Import and Export of Agricultural and Non-Agricultural Goods in West Africa: A Case Study of Nigeria

Author

Listed:
  • Awe, O. O.
  • Akinlana, D. M.
  • Yaya, O. S.
  • Aromolaran, O.

Abstract

This study examines the time series properties of co-integration and causal relationship between oil (non-agricultural) and non-oil (agricultural) import and export in Africa’s largest economy. We employed Granger causality and Johansen and Juselius’s co-integration methods to investigate causal relationships among the variables Naira-US dollars exchange rate (USD), Naira-Pounds exchange rates (GBP), Oil Import (OI), Non-Oil import (NO), Oil Export (OE) and Non-Oil export (NE). We found empirical evidence for co-integration between oil and non-oil import. Our result reveals the existence of long run equilibrium between exchange rates, oil import and export, and non-oil import (agriculture) and export. Non-oil import and export involves those of agricultural products like Cocoa, Timber, Cassava and Groundnut. We show that there is bidirectional Granger causality from import and export of both agricultural (non-oil) and non-agricultural (oil) goods and vice-versa. This empirical relationship followed closely to what economic theory have suggested. The study recommends amongst others, that government should adopt appropriate monetary and fiscal policies that will ensure realistic and stable exchange rates and foster economic growth through import and export of agricultural products.

Suggested Citation

  • Awe, O. O. & Akinlana, D. M. & Yaya, O. S. & Aromolaran, O., 2018. "Time Series Analysis of the Behaviour of Import and Export of Agricultural and Non-Agricultural Goods in West Africa: A Case Study of Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(2).
    • Handle: RePEc:ags:aolpei:276109
    DOI: 10.22004/ag.econ.276109
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    References listed on IDEAS

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    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Ayinde, Opeyemi Eyitayo & Ilori, T. E. & Ayinde, K. & Babatunde, R. O., 2015. "Analysis of the Behaviour of Prices of Major Staple Foods in West Africa: A Case Study of Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-15, December.
    3. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    4. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    5. Kharin, S., 2018. "Price Transmission Analysis: the Case of Milk Products in Russia," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(01).
    6. El Alaoui, Aicha, 2015. "Causality and cointegration between export, import and economic growth: evidence from Morocco," MPRA Paper 65431, University Library of Munich, Germany.
    7. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
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    Cited by:

    1. Olushina O Awe & Robert Mudida & Luis A. Gil‐Alana, 2021. "Comparative analysis of economic growth in Nigeria and Kenya: A fractional integration approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1197-1205, January.
    2. Simla Tokgoz & Summer Allen & Fahd Majeed & Bas Paris & Olajide Adeola & Evans Osabuohien, 2020. "Distortions to agricultural incentives: Evidence from Nigerian value chains," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1027-1045, August.
    3. Awe, Olushina Olawale & Dias, Ronaldo, 2022. "Comparative Analysis of ARIMA and Artificial Neural Network Techniques for Forecasting Non-Stationary Agricultural Output Time Series," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(4), December.
    4. Furuoka, Fumitaka & Yaya, OlaOluwa Simon & Ling, Pui Kiew & Al-Faryan, Mamdouh Abdulaziz Saleh & Islam, M. Nazmul, 2023. "Transmission of risks between energy and agricultural commodities: Frequency time-varying VAR, asymmetry and portfolio management," Resources Policy, Elsevier, vol. 81(C).
    5. Awe, Olushina Olawale & Musa, Ann Precious & Sanusi, Gbenga Peter, 2023. "Revisiting economic diversification in Africa's largest resource-rich nation: Empirical insights from unsupervised machine learning," Resources Policy, Elsevier, vol. 82(C).

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