IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 9 NO. 8 2023
DOI: https://doi.org/10.56201/ijebm.v9.no8.2023.pg149.167

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Exchange Rate Dynamics and Agricultural Sector Performance Nexus: The Nigerian Experience

Odey, Ferdinand Ite, Ph.D, Owan, John Odey, Owan, Julie Njarani

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Abstract

The main objective of the study is to investigate the impact of exchange rate dynamics on agricultural sector performance in Nigeria. The study employed time series data obtained from the Central Bank of Nigeria statistical bulletin, World Development Indicators and National Bureau of Statistics. Agricultural sector performance was disaggregated into the overall agricultural, crop, livestock and fishery output. Autoregressive Distributive Lag (ARDL) and Generalized Autoregressive Conditional heteroskedasticity (GARCH) estimation techniques were used to establish the long run relationship among the variables, and the responsiveness of overall agricultural output, crop, livestock and fishery production to changes in exchange rate. It was revealed that long run relationship exists among the variables in all the estimated models. The result of the Error Correction Mechanism (ECM) within the framework of the ARDL shows that exchange rate has significant impact on agricultural sector performance. The GARCH results revealed that the responsiveness of aggregate agricultural output, crop, livestock and fishery production to changes in exchange rate is negative and statistically significant. This study concludes that the government must consciously direct policy actions towards the agricultural sector to achieve its full potentials in order to place the Nigerian economy on the path of self- sufficiency in agricultural production. The study recommends that; the government should implement appropriate exchange rate policy that will ensure sufficient crop production for both domestic consumption and exports. The movement in the market determined exchange rate should be strictly monitored by the apex bank, in order to ensure that the deregulation in exchange rate is not counterproductive through distortionary prices on agricultural production. The Nigerian go

keywords:

Exchange rate dynamics, Agricultural sector performance, ARDL, GARCH, Nigeria.

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References:

Ada, J. A., Akan, P. A. Angioha, P. U. & Enamhe, D. C. (2021). Knowledge transferability and
workers’ productivity in public hospitals in South-South Nigeria. International Journal of Public
Administration and Management Research (IJPAMR), 6(6), 50-65.
Ajakaiye, D. O. (1985). Short-run effects of devaluation on balance of payments: The influence of
imports structures. The Nigerian Journal of Economics and Social Studies (NJESS), 27(1).

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