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Econometric Analysis of Agricultural Raw Material Exports, Exchange Rate and External Reserves in Nigeria

Author

Listed:
  • Awoderu, Babalola Kayode
  • Abu, Orefi
  • Asogwa, Benjamin Chijioke

Abstract

This study examined the interrelationships among agricultural raw material exports, exchange rates and external reserves in Nigeria spanning 50 years from 1967 to 2017 using data from World Bank, International Monetary Fund and World Trade Organization. Due to the validation of a long-run relationship among the variables by the Johansen cointegration test which showed 2 cointegrating relations significant at 1%, the vector error correction model was adopted. The results showed that agricultural raw materials export has positive effect on external reserves while external reserves have adverse effect on agricultural raw materials export. Exchange rate simultaneously affects agricultural raw material export and external reserves negatively. The Wald test revealed a bi-directional causality between agricultural raw materials export and external reserve as well as a unidirectional causality running from agricultural raw materials export to exchange rate and exchange rate to external reserve. The findings, therefore, provide suggestion that exports should be encouraged.

Suggested Citation

  • Awoderu, Babalola Kayode & Abu, Orefi & Asogwa, Benjamin Chijioke, 2022. "Econometric Analysis of Agricultural Raw Material Exports, Exchange Rate and External Reserves in Nigeria," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 10(01), January.
    • Handle: RePEc:ags:ijfaec:319344
    DOI: 10.22004/ag.econ.319344
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    References listed on IDEAS

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    1. Helmut Lütkepohl, 2005. "New Introduction to Multiple Time Series Analysis," Springer Books, Springer, number 978-3-540-27752-1, September.
    2. Augustine C. Osigwe & Maria Chinecherem Uzonwann, 2015. "Causal Relationship among Foreign Reserves, Exchange Rate and Foreign Direct Investment: Evidence from Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 884-888.
    3. repec:hur:ijaraf:v:5:y:2015:i:1:p:190-198 is not listed on IDEAS
    4. Fakhri, Hasanov, 2010. "The Impact of Real Effective Exchange Rate on the Non-oil Export: The Case of Azerbaijan," MPRA Paper 29556, University Library of Munich, Germany.
    5. International Monetary Fund, 2001. "Reserve Adequacy in Emerging Market Economics," IMF Working Papers 2001/143, International Monetary Fund.
    6. Fakhri Hasanov, 2010. "The Impact of Real Oil Price on Real Effective Exchange Rate: The Case of Azerbaijan," Discussion Papers of DIW Berlin 1041, DIW Berlin, German Institute for Economic Research.
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    Cited by:

    1. Sayef Bakari & Sofien Tiba, 2022. "Agricultural Exports, Agricultural Imports And Economic Growth In China," Journal of Smart Economic Growth, , vol. 7(3), pages 35-61, September.

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