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Macroeconomic Variables And Food Price Inflation In Nigeria (1980-2018)

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  • Akinbode, Sakiru Oladele
  • Olabisi, Jayeola
  • Adekunle, Chioma Patricia
  • Jimoh, Olaide Mistura

Abstract

Despite the abundance of literature on general inflation, there is limited knowledge on the specific effects of macroeconomic variables on food inflation in Nigeria. The study examined the effects of key macroeconomic variables on food price inflation in Nigeria using data from 1980 to 2018 obtained from the World Bank and the Central Bank of Nigeria (CBN).Stationary tests revealed that some of the series were stationary at level i.e. I(0) while others were stationary at first difference i.e. I(1). Therefore, the data were analyzed within the ARDL framework. The bound test revealed the presence of long run relationship among the variables. Food production, exchange rate, money supply and crude oil prices were significant in the short run while all of these except food production were significant in long run. It takes about 1.1 years for the system to restore back to the long run equilibrium path in case of an external shock. Post estimation tests confirmed the validity of the model estimated. Measures aimed at ensuring increased food production such as provision of loan through guided increase in money supply and effective protection of the Naira against excessive depreciation are recommended.

Suggested Citation

  • Akinbode, Sakiru Oladele & Olabisi, Jayeola & Adekunle, Chioma Patricia & Jimoh, Olaide Mistura, 2021. "Macroeconomic Variables And Food Price Inflation In Nigeria (1980-2018)," Journal of Rural Economics and Development, University of Ibadan, Department of Agricultural Economics, vol. 23(1), September.
    • Handle: RePEc:ags:ngjred:313621
    DOI: 10.22004/ag.econ.313621
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    References listed on IDEAS

    as
    1. T.O. Akinbobola, 2012. "The dynamics of money supply, exchange rate and inflation in Nigeria," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(4), pages 1-8.
    2. Abbott, Philip C. & Hurt, Christopher & Tyner, Wallace E., 2009. "What's Driving Food Prices? March 2009 Update," Issue Reports 48495, Farm Foundation.
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