Time Series Analysis of the Behaviour of Import and Export of Agricultural and Non-Agricultural Goods in West Africa: A Case Study of Nigeria

Abstract

This study examines the time series properties of co-integration and causal relationship between oil (non-agricultural) and non-oil (agricultural) import and export in Africa's largest economy. We employed Granger causality and Johansen and Juselius's co-integration methods to investigate causal relationships among the variables Naira-US dollars exchange rate (USD), Naira-Pounds exchange rates (GBP), Oil Import (OI), Non-Oil import (NO), Oil Export (OE) and Non-Oil export (NE). We found empirical evidence for co-integration between oil and non-oil import. Our result reveals the existence of long run equilibrium between exchange rates, oil import and export, and non-oil import (agriculture) and export. Non-oil import and export involves those of agricultural products like Cocoa, Timber, Cassava and Groundnut. We show that there is bidirectional Granger causality from import and export of both agricultural (non-oil) and non-agricultural (oil) goods and vice-versa. This empirical relationship followed closely to what economic theory have suggested. The study recommends amongst others, that government should adopt appropriate monetary and fiscal policies that will ensure realistic and stable exchange rates and foster economic growth through import and export of agricultural products.

Distortions to agricultural incentives: Evidence from Nigerian value chains

“…Agriculture constitutes the largest sector in the Nigerian economy, employing around two-thirds of the country's workforce (FAO, 2013). Agricultural commodity exports dominated the Nigerian economy in the 1960s and 1970s, and crude oil became the main export item after the mid-1970s (Awe, Akinlana, Yaya, & Aromolaran, 2018). The agricultural sector is characterized by small farms, low productivity, low levels of investment, and high input costs (FAO, 2013).…”

Energy and Economic Development in Nigeria: An Econometric Approach based on Fractional Integration

“…Under the military administration of President Gowon, Nigeria experienced the highest growth rate of economic growth but its real GDP per capita had the highest during the military administration of Olusegun Obasanjo. The drastic decline in the per capita GDP growth rate of Nigeria was noticeable when President Shehu Shagari took over the affairs of the country (Awe et al, 2018).…”

“…This justifies the relevance of the present study in providing useful insights to the energy-economic development nexus in Nigeria. According to Awe et al (2018), the performance of the Nigerian economy had improved since 2009; however, it is still characterized by low savings accompanied by poor economic diversification.…”

Fractional integration analysis of precipitation dynamics: empirical insights from Nigeria

“…However, due to differences in geomorphology and climatic patterns, trends of rainfall pattern may differ across different regions of the world (Tan et al, 2017). Our study of rainfall dynamics is quite important because it is evident that agriculture forms the backbone of most of the countries in the world, and in Nigeria, agriculture is the second largest contributor to its economy, after oil (Awe et al, 2018). Therefore, rainfall (precipitation) is one of the most important factors to be considered while planning agricultural and commercial activities.…”