TRADE OPENNESS AND THE IMPLICATIONS FOR AGRICULTURAL OUTPUT IN NIGERIA

BY

AJALA MOSHOOD ABIOLA

08163384338

 AND

LAWAL WASIU ADEKUNLE

07031692008

DEPARTMENT OF ECONOMICS, SCHOOL OF SECONDARY EDUCATION. (ARTS AND SOCIAL SCIENCES PROGRAMMES)

OYO STATE COLLEGE OF EDUCATION, LANLATE,

OYO STATE

Abstract

Trade policy is a major determinant of agricultural output in Nigeria which is considered as one of the many ways through which the nation’s economy could grow. Agricultural sector in the country is one of the sectors in which the economy has a comparative advantage. It provides raw materials for the teeming industries in the country and also constitutes the largest employer of labour (statistical Bulletin 2019). The objective of the study was to investigate the relationship that exists between trade openness and agricultural output in Nigeria. The methodology adopted was the Autoregressive Distributed Lag (ARDL) model, while the Cobb Douglas production theory was adopted. The data for the study was time series data spanning 39 year. Test of stationarity and the study was conducted using the Philips Perron (PP) approach. The findings revealed that the Degree of Openness had a positive relationship with agricultural output (T= 0.72). It further revealed that Government Expenditure on Agriculture had a negative correlation with the agricultural output or VAO (T= 1.28) which negate the a-priori expectation. Labour participation in agriculture was positively related and was significant to the value of agricultural output (T=11.48). The study recommends among others that government should regulate trade activities, most especially at the land borders of the country as it will help improve the outcomes of trade openness.

Keywords: Trade Openness, Agricultural Output, Nigeria