AKSU Journal of Agricultural Economics, Extension and Rural Development

THE EFFECT OF NAIRA-DOLLAR EXCHANGE RATE ON AGRICULTURAL OUTPUT IN NIGERIA

Author:  Agom, D. I., and Aaron, E. M. and Ilyasu B. Mohammed

Abstract
Effect of Naira-Dollar exchange rate on Agricultural output was the kernel of this research and was carried out in Nigeria using time series data that spans from 1970 through 2019. The data were collected on agricultural output, annual rain fall (weather), government expenditure, total Goss Domestic Product and exchange rate. The SPSS and gretl software packages were used to analyse the collected data to meet the objectives of the study which were; to generally analyse the effect of Naira-Dollar exchange rate on Agricultural output in Nigeria; and specifically, to examine the exchange rate and Agricultural output trend in Nigeria during the period and to determine the relationship between Naira-Dollar Exchange rate and Agricultural Output. The data series were subjected to Augmented Dicker Fuller test and the result had it that all the data sets were stationary at first difference. The findings revealed that, both the agricultural output and the exchange rate were facing fluctuating movement over the period of this study. The Ordinary Least Squares method was used to analyse the effect of Naira-Dollar exchange rate. Four functional forms were tested and the Linear functional form became the lead equation and the result showed that, the exchange rate had no significant effect on agricultural output in Nigeria upholding the null hypothesis and discarding the alternative. The correlation matrix was used to analyse the relationship between exchange rate and agricultural output and the result indicated 0.8649 which shows that the two variables are strongly positively related to each other. It is on this note that it is recommended that since the naira-dollar has not really shown any significant effect on the agricultural output, other factors that affect agricultural output should be worked upon more seriously as they tend to boost the agricultural sector than the exchange rate.