Trade openness and growth in agricultural sector output in Nigeria
Ewubare Dennis Brown, Nyeche Worlocho Ezebunwor
The study examined trade openness and growth in the output of the agricultural sector in Nigeria. The objectives were to investigate the impact of degree of openness and exchange rate on agricultural sector growth in Nigeria. The study employed quasi-experimental research design. Time series data were used. Data were generated from central bank of Nigeria statistical bulletin and National bureau of statistics statistical bulletin. The study adopted the analytical method of ordinary least squares (OLS) of multiple regression. Other methods of analysis employed in this study includes; unit root test, co-integration test and parsimonious error correlation model. The estimated parsimonious error correction result showed that the overall model is satisfactory with an R-squared of 0.596, thus 60 percent of the systematic variation in growth of agricultural output is explained by the ECM. The ECM coefficient appeared with a negative sign and is statistically significant at the 5% level. Meanwhile, the current and lag one forms of all the independent variables (DOP, EXR and UEP) were rightly signed, meaning that both degree of openness and exchange rate are positively signed. All these conform to apriori expectation. But for the three periods, the independent variables were not statistically significant at 5 percent level. We could infer from these results that trade openness is not the only determinant of growth in agricultural output in Nigeria during the period under review. Therefore, the study recommends that the government should reassess its reforms programmes and policy on trade so that the end product should be significant impact on the growth of agricultural sector.