The Impact of Agricultural Exports on Economic Growth in Nigeria

Abstract

Agriculture is the backbone of Nigeria’s socioeconomic development. This paper investigates the impact of agricultural exports on economic growth in Nigeria using OLS regression, Granger causality, Impulse Response Function and Variance Decomposition approaches. Both the OLS regression and Granger causality results support the hypothesis that agricultural exports- led economic growth in Nigeria. The results, however, show an inverse relationship between the agricultural degree of openness and economic growth in the country. Impulse Response Function results fluctuate and reveal an upward and downward shocks from agricultural export to economic growth in the country. The Variance Decomposition results also show that a shock to agricultural exports can contribute to the fluctuation in the variance of economic growth in the long run. For Nigeria to experience a favourable trade balance in agricultural trade, domestic processing industries should be encouraged while imports of agricultural commodities that the country could process cheaply should be discouraged. Undoubtedly, this measure could drastically reduce the country’s overreliance on food imports and increase the rate of agricultural production for self-sufficiency, exports and its contribution to the economic growth in the country.

An Assessment of the Importance of the Agricultural Sector on Economic Growth and Development in South Africa

“…The Granger causality technique was designed with the intention of identifying which variables influence or cause each other to move. The causal relationships among explanatory variables were uncovered using pairwise Grangercausality tests (Verter & Bečvářová, 2016).…”

Assessment of the impact of the international trade in agricultural products on the EU economic growth

“…ignore the rules of supply and demand) and lead to high consumer-paid prices and high governmental expenditure (on subsidization, direct payments, surplus removal, etc.). For this reason, the international trade in agricultural products may determine a balanced economic growth only in case trade restrictions and distortions are drastically reduced (McCally & Nash, 2007;Verter, 2015, Verter & Bečvářová, 2016. As it was stressed by Josling et al (2010), by attempting to stabilise domestic prices and employing protectionist measures, governments exacerbate fl uctuations of international markets.…”

“…As it was noted by Josling et al (2010), the studies of the international trade in agricultural products and agri-food is a relatively new and specifi c area of economic research. Minding the results of some scientifi c studies indicating signifi cant structural differences in economic growth between low, lower-middle and upper-income countries (Verter & Bečvářová, 2016) as well as the projections of the global population and food demand future trends (with reference to the data of the Food and Agriculture Organization of the United Nations (2009), the number of the global population will have exceeded 9 billion by 2050, which, in turn, will determine the demand for cereals to reach 3 billion tones by the same year, up from today's nearly 2.1 billion tonnes), the analysis of the impact of the international trade in agricultural products on economic growth is extremely relevant.…”

The Heckscher-Ohlin Model and the Performance of Cocoa Products in Nigeria

“…Also, in the light that cocoa is the critical non-oil foreign exchange earner, this research is essential as the price of oil continued to dwindle on the world market, Nigeria can no longer depend solely on oil export as a source of government financing. There is an urgent need for the country to look beyond petroleum for foreign government revenues (Verter and Bečvářová, 2016), which cocoa has a vital role to play in the global market. Given that cocoa is the second highest export products in Nigeria after petroleum, this study aimed at determining the effects of external factors on the production of cocoa beans in the country.…”