IMPACT OF SELECTED MACROECONOMIC VARIABLES ON AGRICULTURAL OUTPUT IN NIGERIA (1981 – 2017).
IMPACT OF SELECTED MACROECONOMIC VARIABLES ON AGRICULTURAL OUTPUT IN NIGERIA (1981 – 2017).
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Date
2021-04
Authors
SIMON, Ibrahim Achi
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Abstract
In the past 3 decades (1981-2017), the Nigerian government has set out various policies targeted at
stimulating the macroeconomic variables and consequently affecting the agricultural outputs
positively in the economy, but have inadequately achieved these goals. This is evidenced in the
annual agricultural outputs which are always insufficient to cater to the rising population of the
country. Hence, this study examined the impact of selected macroeconomic variables onNigeria’s
agricultural outputs (aggregate and dis-aggregated) over the time under review(1981-2017). The
Cobb-Douglas Production theory formed the theoretical framework for the study. After reviewing
relevant works of literature, the suitable analytical techniques (Johansen cointegration(long-run
relationship), Fully Modified OLS(FMOLS(long-run impacts) and Error Correction Model
(ECM)(short-run impact)) were chosen and employed. The five (One aggregate and four
disaggregated) estimated Johansen results all indicated a long-run equilibrium relationship.
Furthermore, the coefficients of the FMOLS results for aggregate agricultural output, in the long
run, reveals that credit and Non-oil importsaresuitable macroeconomic variables that can be used
to positively and negatively impact the aggregate agricultural outputs in Nigeria respectively. In
the short run, non-oil exports impact much positively with a 24.6% increase for any 10% increase.
While Non-Oil Imports impact much negatively to aggregate agricultural output with -20.6% for
any 10% increase. For the sub-sectors, the FMOLS results for crop production suggested credit to
be a more suitable variable to use to rapidly increase the sub-sector's outputs with a 2.07%
increase to the output for a 10% increase; while Non-Oil imports can impose the most negative
impact with -0.41% reduction the sub-sector’s output for any 10% increase. And in the short run,
Non-oil exports impact much positively with 0.804% for any 10% increase; while non-oil imports
impact much negatively to the sub-sector with -0. 8.15% for any 10% increase. Again for a quick
and much positive response in fish production, in the long run, the result suggests credit be the
most suitable variable with a 2.323% increase in fish output for any 10% increase; while Non-Oil
exports can impose the most negative impact with -1.996% reduction of fish output for any 10%
increase. And in the short run, Non-oil imports impact much positively with a 0.990% increase in
fish output for any 10% increase. While non-oil export impacts much negatively with -1.013%.
reduction for any 10% increase. Considering the result obtained from the FMOLS estimation for
the forestry sub-sector, to achieve the quickest and positive response in forestry production, in the
long run, the result suggests Non-Oil export as the most suitable variable with a 0.616% increase to
the forestry output for any 10% increase; while credit can impose the most negative impact with -
0.716% reduction of forestry output for any 10% increase. In the short run, Non-oil exports impact
much positively with a 0.322% increase in forest output for any 10% increase; while Non-Oil
imports impact much negatively with a -0.255% reduction for any 10% increase. Finally, to achieve
a fast and much positive response in livestock production, in the long run, the FMOLS result
suggests labour as the most suitable variable with a 0.514% increase to the livestock output for any
10% increase; while public debt servicing can impose a quick and more negative impact on
livestock output with -0.140% reduction in the output for any 10% increase. In the short run, labour
impacts more positively with a 0.307% increase in the output for any 10% increase. Thus, the
results obtained suggest that macroeconomic variables still affect the sector’s outputs; and
practical policy recommendations by policymakers to help and rapidly boost the sector output’s
growth is by helping farmers via the good provision of credit and helping them to market their
produce at the international markets which can help them earn foreign currencies and thus,
stimulate them to produce more and consequently lead to expansion of the whole sector vis-à-vis the Nigerian economy.
Description
A DISSERTATION SUBMITTED TO THE SCHOOL OF POSTGRADUATE
STUDIES AHMADU BELLO UNIVERSITY IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE AWARD OF A MASTER DEGREE IN
ECONOMICS
Keywords
IMPACT OF SELECTED MACROECONOMIC VARIABLES,, AGRICULTURAL OUTPUT,, NIGERIA, (1981 – 2017).