Trade Openness And Agricultural Sector Performance In Nigeria
Akpan Joe Itah
Institute of International Trade and Development University of Port Harcourt, Nigeria
UDEORAH Sylvester Alor Favour
Institute of International Trade and Development University of Port Harcourt, Nigeria
OHALE Lawrence
Institute of International Trade and Development University of Port Harcourt, Nigeria
Keywords: Agricultural sector, Exchange rate, Finished goods, Openness, Trade intensity
Abstract
This study examined trade openness and agricultural sector performance in Nigeria from 1981to 2021. The objectives of the study are to; examine the impact of trade intensity index, trade restrictions and exchange rate on the performance of the agricultural sector output in Nigeria. Annual secondary data were collected on from Central Bank of Nigeria (CBN) statistical bulletins, Nigeria’s National Bureau of Statistics and the World Development Index (WDI). The main technique of analysis used is the parsimonious error correction model (PECM). But the technique of Augmented Dickey Fuller (ADF) unit root test preceded the PECM. The unit root test result showed that all the variables were stationary at order one, which satisfied the requirement for using PECM. The empirical findings showed that there is a long-run relationship among the variables in the estimated model. The short-run result depicted by the PECM result showed that trade intensity index has a positive relationship with agricultural sector output. Similarly, trade restrictions contributed positively to agricultural output, hence it has a significant impact on the agricultural sector. Moreover, exchange rate contributed positively to agricultural sector output. Therefore, exchange rate has significant impact on the agricultural sector. Based on the findings of this work, the following policy recommendations were suggested: - Policymakers should ensure that Nigeria leverages on gains of trade openness by producing and adding value to agricultural produce and exporting finished goods in which it enjoys comparative and competitive advantage. Also, regulatory bodies should strive to limit the restrictions on the use of capital goods to boost agricultural production.