Macroeconomic Policy and Agricultural Value Chain in Nigeria
DOI:
https://doi.org/10.25079/ukhjss.v2n2y2018.pp31-40Keywords:
Agricultural Value Chain, Autoregressive Distributed Lag, Macroeconomic PolicyAbstract
The objective of the paper was to investigate macroeconomic policy and agricultural value chain in Nigeria. The period covered is 1981–2016. The analysis is based on the autoregressive distributed lag framework. A long-run equilibrium relationship was found among the variables used in the investigation. Government expenditure and broad money supply (the macroeconomic policy variables used) were found to have significant positive impact on the agricultural value chain. Energy was found to also have a direct statistically significant impact on agricultural value chain. Based on the results, it is recommended that there should be an enabling macroeconomic policy framework, which gives emphasis to improved budgetary allocation to the agricultural sector, increases money supply, and promotes agencies that can directly impact the level of finance to agricultural value chain related businesses in Nigeria. Above all, electricity supply should be enhanced.
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References
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Nyasha, S. & Odhiambo, N. M. (2014). The impact of banks and stock market development on economic growth in South Africa: An ARDL-bounds testing approach. Contemporary Economics, 9(1), 93-108.
Oji-Okoro, I. (2011). Analysis of the contribution of agricultural sector on the Nigerian economic development. World Review of Business Research, 1(1), 191-200.
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Pesaran, M. H., Shin, Y. & Smith, R. (2001). Bound testing approaches to the analysis of level relationship. Journal of Applied Econometrics, 16(3), 289-326.
Phillips, P. C. B. & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75, 335-346.
Porter, M. E. (1990). The Competitive Advantage of Nations. New York: Simon and Schuster.
Romer, P.M. (1986). Increasing returns and long-run growth. Journal of Political Economy 94, 1002-1037.
Schmitz, H. (2005). Value Chain Analysis for Policymakers and Practitioners. Geneva: International Labour Organisation.
Scott, W. R. (1995). Institutions and Organizations. London: Sage.
Shevchuk, V. & Kopych, R. (2017). Modelling of fiscal policy effects on agriculture and industry in Ukraine. Information Systems in Management, 6(2), 131-142.
United Nations Industrial Development Organization. (2009). AgroValue Chain Analysis and Development, the UNIDO Approach. Vienna: Staff Working Paper.
World Bank. (2017). World Development Indicators. Washington DC: The World Bank.
Abula, M. & Ben, D. M. (2016). The impact of public agricultural expenditure on agricultural output in Nigeria (1981-2014). Asian Journal of Agricultural Extension, Economics and Sociology, 11(2), 1-10.
Akinlo, A. E. (2006). The stability of money demand in Nigeria: An autoregressive distributed lag approach. Journal of Policy Modeling, 28, 445-452.
Akpaeti, A. J., Bassey, N. E., Okoro, U. S. & Nkeme, K. K. (2014). Trends and drivers of agricultural investments and growth in Nigeria: The pre and financial sector reforms experience. Asian Journal of Economic Modelling, 2(3), 115-127.
Altenburg, T. (2006). Governance patterns in value chains and their development impact. The European Journal of Development Research, 18(4), 498-521.
Aroriode, O. R., & Ogunbadejo, H. K. (2014). Impact of macroeconomic policy on agricultural growth in Nigeria. Journal of Agriculture and Veterinary Science, 7(11), 1-5.
Aurbach, A. J. (2004). Budget Windows, Sunsets and Fiscal Control. Berkley: Manuscript, University of California.
Barnes, M. (2004). Value Chain Guidebook. A Process for Value Chain Development. Alberta: Agriculture and Food Council of Alberta Value Chain Initiative.
Charles, N. O, Mordi, E. A. & Banji S. A. (2010). The Changing Structure of the Nigerian Economy. The Research Department, Central Bank of Nigeria.
Dar, A. A. & Amir, K. S. (2002). Government size, factor accumulation and economic growth: Evidence from OECD countries. Journal of Policy Modeling, 24(7/8), 679-692.
Dickey, D. A. & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74, 427-431.
Dlamini, N. S., Tijani, A. A. & Masuku, M. B. (2015). The impact of macroeconomic policies on agriculture in Swaziland: An empirical analysis. Journal of Economics and Sustainable Development, 6(15), 140-149.
Duasa, J. (2007). Determinants of Malaysian trade balance: An ARDL bound testing approach. Global Economic Review, 36(1), 89-102.
Engle, R. F. & Granger, C. W. J. (1987). Co-integration and error correction: Representation, estimation and testing. Econometrica, 55(2), 251-276.
Evbuomwan, G. O., Emmanuel, U. U., Moses, F. O., Amoo, B. A. G., Essien, E. A., Odey, L. I. & Abba, M. A. (2003). Agricultural development issues of sustainability. In: Nnanna, O. J., Alade, S. O. & Odoko, F. O. (Eds.). Contemporary Economic Policy Issues in Nigeria. Nigeria: Central Bank of Nigeria.
Eyo, E. O. (2008). Macroeconomic environment and agricultural sector growth in Nigeria. World Journal of Agricultural Sciences, 4(6), 781-786.
Giuliani, E., Pietrobelli, C. & Rabellotti, R. (2005). Upgrading in global value chains: lessons from Latin American clusters. World Development, 33(4), 549-574.
Grunert, K., Fruensgaard, J., Risom, L., Jespersen, K. & Sonne, A. (2005). Market orientation of value chains; a conceptual framework based on four case studies from the food industry. European Journal of Marketing, 39(5/6), 429-455.
Jaffee, S., Siegel, P. & Andrews, C. (2010). Rapid Agricultural Supply Chain Risk Assessment: A Conceptual Framework. Agriculture and Rural Development Discussion Paper 47. Washington DC: The World Bank.
Jhingan, M. L. (2010). The Economic of Development and Planning. 38th ed. New Delhi: Virnda Publication Ltd. p. 97.
Johansen, S. & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration-with applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2), 169-210.
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254.
Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in Gaussian vector autoregressive models. Econometrica, 59(6), 1551-1580.
Kaplinsky, R. & Morris, M. (2001). A Handbook for Value Chain Research. Ottawa: International Development and Research Centre.
Kwiatkowski, D., Phillips, P. C. B., Schmidt, P. & Shin, Y. (1992). Testing the null hypothesis of stationary against the alternative of a unit root. Journal of Econometrics, 54, 159-178.
Lawal, W. A. (2011). An analysis of government spending on agricultural sector and its contribution to GDP in Nigeria. International Journal of Business and Social Science, 2(20), 244-250.
Letsoalo, A. & Kirsten, J. (2003). Modelling the Impact of Macroeconomic and Trade Policies on the South African Agricultural Sector. Pretoria, South Africa: Being a Paper Presented at the 41st Annual Conference of the Agricultural Economic Association of South Africa (AEASA).
Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3-42.
Mango, N., Mapemba, L., Tchale, H., Makate, C., Dunjana, N. & Lundy, M. (2015). Comparative analysis of tomato value chain competitiveness in selected areas of Malawi and Mozambique. Cogent Economics and Finance, 3, 1088429.
Moosa, I. A. (2002). FDI: Theory, Evidence and Practice. New York: Palgrave.
Muftaudeen, O. O. & Abdullahi, H. (2014). Macroeconomic policy and agricultural output in Nigeria: Implications for food security. American Journal of Economics, 4(2), 99-113.
National Bureau of Statistics. (2010). Nigeria Poverty Profile. Abuja: National Bureau of Statistics.
Nyasha, S. & Odhiambo, N. M. (2014). The impact of banks and stock market development on economic growth in South Africa: An ARDL-bounds testing approach. Contemporary Economics, 9(1), 93-108.
Oji-Okoro, I. (2011). Analysis of the contribution of agricultural sector on the Nigerian economic development. World Review of Business Research, 1(1), 191-200.
Olinto, P., Beegle, K., Sobrado, C. & Uematsu, H. (2013). The state of the poor: Where are the poor, where is extreme poverty harder to end, and what is the current profile of the world’s poor? Economic Premise, 125, 1-8.
Onoja, A. O. & Achike, A. I. (2014). Econometric Analysis of Long and Short-run Determinants of Agricultural Value Addition in Africa. Arusha, Tanzania: Being a Paper Prepared for Presentation at the Trade Policy Research Forum Under the Auspices of Trade Policy Training Centre in Africa (TRAPCA).
Opurum, K. (2018). 2018 Outlook for Nigeria’s Agriculture. Leadership Newspaper. Available from: https://www.leadership.ng/2018/01/10/2018-outlook-nigerias-agricultural-sector. [Last accessed on 2018 Jan 10].
Pesaran, M. H., Shin, Y. & Smith, R. (2001). Bound testing approaches to the analysis of level relationship. Journal of Applied Econometrics, 16(3), 289-326.
Phillips, P. C. B. & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75, 335-346.
Porter, M. E. (1990). The Competitive Advantage of Nations. New York: Simon and Schuster.
Romer, P.M. (1986). Increasing returns and long-run growth. Journal of Political Economy 94, 1002-1037.
Schmitz, H. (2005). Value Chain Analysis for Policymakers and Practitioners. Geneva: International Labour Organisation.
Scott, W. R. (1995). Institutions and Organizations. London: Sage.
Shevchuk, V. & Kopych, R. (2017). Modelling of fiscal policy effects on agriculture and industry in Ukraine. Information Systems in Management, 6(2), 131-142.
United Nations Industrial Development Organization. (2009). AgroValue Chain Analysis and Development, the UNIDO Approach. Vienna: Staff Working Paper.
World Bank. (2017). World Development Indicators. Washington DC: The World Bank.
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Published
2018-12-27
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How to Cite
Macroeconomic Policy and Agricultural Value Chain in Nigeria. (2018). UKH Journal of Social Sciences, 2(2), 31-40. https://doi.org/10.25079/ukhjss.v2n2y2018.pp31-40
