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The Impact of Exchange Rate Dynamics on Agricultural Output Performance in Nigeria

Author

Listed:
  • Adekunle, Wasiu
  • Ndukwe, Innocent

Abstract

The study investigated the possible asymmetric effect of real exchange rate dynamics on agricultural output performance in Nigeria over the period of 1981 to 2016 by collecting data from secondary sources. The study employed a combination of stationary and nonstationary variables as was found out through the ADF unit root test. Based on the Bounds test for cointegration, a long-run relationship was absent between real exchange rate and agricultural output, irrespective of specifications. Generally, the result of model estimation showed that the significant drivers of agricultural output are real exchange rate (log-levels), real appreciation and depreciation (after some lags), industrial capacity utilization rate, and government expenditure on agriculture (after some lags). ACGSF loan exerted positive and insignificant influence on agricultural output. In addition, though the effect of real appreciation was larger than that of real depreciation, the present study could not find any evidence in support of the asymmetric effect of real exchange rate dynamics on agricultural output performance in the Nigerian economy. It is therefore suggested that fiscal and monetary authorities in Nigeria should work in unison at ensuring that the full potentials of the agricultural sector are harnessed for the growth and development of the country.

Suggested Citation

  • Adekunle, Wasiu & Ndukwe, Innocent, 2018. "The Impact of Exchange Rate Dynamics on Agricultural Output Performance in Nigeria," MPRA Paper 87750, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:87750
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    References listed on IDEAS

    as
    1. Oyinbo, O. & Rekwot, G. Z., 2014. "Econometric Analysis of the Nexus of Exchange Rate Deregulation and Agricultural Share of Gross Domestic Product in Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 6(1), pages 1-7.
    2. repec:hur:ijaraf:v:5:y:2015:i:1:p:190-198 is not listed on IDEAS
    3. Kwanashie, M & Garba, A-G & Ajilima, I, 1997. "Policy Modelling in Agriculture : Testing the Response of Agriculture to Adjustment Policies in Nigeria," Papers 57, African Economic Research Consortium.
    4. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    5. repec:aer:wpaper:57 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Alexander Olawumi Dabor (PhD) & UMORU David & eauty Ekiomado Eguasa (PhD) & LOVY Omote-Ivie Atarere (PhD) & Victor Chukwudeme Odu (PhD, FCA) & Abusomwa Racheal Eloho (PhD), 2023. "Cash Crop Output and Foreign Currency Exchange Rate in Nigeria: A Vector Error Correction Model Analysis," Journal of Agriculture and Crops, Academic Research Publishing Group, vol. 9(2), pages 187-198, 04-2023.
    2. Nith, Kosal & Ly, Singhong, 2018. "Reinvigorating Cambodian agriculture: Transforming from extensive to intensive agriculture," MPRA Paper 93091, University Library of Munich, Germany, revised 23 Dec 2018.
    3. Abiola John Asaleye & Rotdelmwa Filibus Maimako & Adedoyin Isola Lawal & Henry Inegbedion & Olabisi Popoola, 2021. "Monetary Policy Channels and Agricultural Performance: Evidence from Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(3), pages 205-218, March.
    4. Okidim, Iboh Andrew & Obe-Nwaka, Mba Oloi & Okuduwor, Adibie & Tuaneh, Godwin Lebari, 2023. "Dynamics of Stabilization Policies and Investment Effects on Agricultural Output in Nigeria (1981-2019)," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 11(2), April.
    5. Nith, Kosal & Ly, Singhong, 2018. "Reinvigorating Cambodian agriculture: Transforming from extensive to intensive agriculture," MPRA Paper 93086, University Library of Munich, Germany, revised 23 Dec 2018.
    6. Paitoon Chetthamrongchai & Sudawan Somjai & Thitinan Chankoson, 2020. "The contribution of macroeconomic factors in determining the economic growth, export and the agricultural output in agri-based ASEAN economies," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(3), pages 2043-2059, March.
    7. Lionel Effiom & Emmanuel Uche & Otei Asuquo Otei, 2021. "Asymmetric effects of capital flight on domestic investment in Nigeria: evidence from non-linear autoregressive distributed lag model," SN Business & Economics, Springer, vol. 1(10), pages 1-23, October.

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    More about this item

    Keywords

    Keywords: Real exchange rate; Agricultural output; and Asymmetry;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

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