Exchange Rate and Agricultural Exports: Evidence From Nigeria (1981-2019)

International Journal of Research and Scientific Innovation (IJRSI) | Volume IX, Issue IV, April 2022 | ISSN 2321–2705

Exchange Rate and Agricultural Exports: Evidence From Nigeria (1981-2019)

Joseph Olufemi OGUNJOBI¹, Olufemi Adebayo OLADIPO (PhD)^2*, Oluwasegun ESEYIN³, Olaoluwa OPAOLA⁴, Ishola James ARANSIOLA (PhD)^5
1Department of Economics, Landmark University, Omu-Aran, Kwara State, Nigeria
²Department of Accounting and Finance, Landmark University, Omu-Aran, Kwara State, Nigeria.
³Department of Economics, Landmark University, Omu-Aran, Kwara State, Nigeria
⁴Department of Economics, Landmark University, Omu-Aran, Nigeria
⁵Department of Business Administration, Thomas Adewumi University, Oko, Kwara State, Nigeria.
*Corresponding Author

Abstract: Exchange rate has become one of the major issues Nigerian economy has been confronted with in the recent times especially since one of the goals of all economies is to have a stable exchange rate. The concept of exchange rate was introduced into the analysis of economic growth and development. This study examined the impact of exchange rate on agricultural exports in Nigeria from 1981 to 2019. The Auto regressive distributed lag (ARDL) model and Granger causality test were employed as analytical tools to test for the existence of a relationship between the variables. This research generally places importance on the effect of interest rate, exchange rate, total exports, inflation rate and loans to the agricultural sector on agricultural exports. However, it is mainly concerned with the relationship between exchange rate and agricultural exports. The study establishes that exchange rate significantly affects agricultural exports and there is no causality between them. By implication, exchange rate has a direct or positive relationship with agricultural exports in Nigeria in the long run. This therefore implies that an increase in exchange rate will lead to an increase in the level of agricultural exports in the long run.

Keywords: Exchange Rate, Agricultural Export, Economic Growth, Nigeria

I. INTRODUCTION

Exchange rate is a major tool for macroeconomic policy and its fluctuations may have major effects on prices of tradeable and non-tradeable commodities (Bobai, Ubangida& Umar, 2013). Most importantly, there has been a recurring argument concerning which exchange rate policy should be adopted in developing countries (Kandil, 2004). It is likely for exchange rate changes to determine to a certain degree, economic performance. Therefore, in determining whether or not exchange rate fluctuations are of benefit or not, it becomes necessary to check the effects the exchange rate movements on the economic sectors.

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