Effects of Climate Change, Poverty and Macroeconomic Policies on Agricultural Trade Performance in Nigeria.

ABSTRACT

Aims: This study ascertained the joint influences of climate factors, poverty and macroeconomic environment on agricultural export performance in Nigeria. Study Design: The study is a survey based on time series data. Place and Duration of Study Secondary data covering 32 years (1978-2009) obtained from Central Bank of Nigeria’s Annual Report and Statistical Bulletin and National Bureau of Statistics were used for the survey. Methodology: The sample size was 32 (years) based on data availability. Data analysis was conducted using bound testing approach of co-integration advanced by Pesaran et al. [25] otherwise known as Autoregressive Distributed Lag (ARDL).model. Test for unit roots in the series were done at their levels and first differences using Augmented Dickey Fuller and Philips Perron tests before applying the ARDL model. Results: Preliminary results from the ARDL model indicated that climate variability (variations in mean annual rainfall), gross fixed capital formation (proxy for wealth accumulated in the economy) and macroeconomic variables including interest rate and volume of domestic credit advanced to the private sector significantly influenced the performance level of agricultural export. However, on the long-run, macroeconomic factors (interest rate and credit to the private sector) and gross fixed capital of the economy (with p values of 0.01, 0.07 and 0.03 respectively were the most significant determinants of agricultural export trade performance in the country within the review period. On the short run, it was confirmed that gross fixed capital formation (wealth) Granger caused the level of agricultural export performance while agricultural export performance level Granger caused volume of domestic credit advanced to the private sector of the economy both with p values of 0.07. Conclusion: It was recommended that macroeconomic policies aimed at increasing farm credit and reduction of interest rate should be strengthened; while programmes to build resilience to climate variability such as irrigation facilities and capacity building in climate change adaptation should be put in place by the Nigerian government.