EXCHANGE RATE MOVEMENTS AND THE AGRICULTURAL SECTOR IN NIGERIA: AN EMPIRICAL INVESTIGATION
EXCHANGE RATE MOVEMENTS AND THE AGRICULTURAL SECTOR IN NIGERIA: AN EMPIRICAL INVESTIGATION

Summary/Abstract: This study examined the impact of exchange rate movements on the agricultural sector in Nigeria. Time series data and Ordinary Least Square (OLS) estimation technique were employed in this study to address the specified objective. The variables employed in this study were exchange rate, Agric GDP, Government Capital Expenditure, foreign direct investment, credit to private sector, and Lending interest rate. The result showed that exchange rate movements play a significant role in the agric sector performance in Nigeria. Specifically, the findings showed that exchange rate, government capital expenditure, foreign direct investment and lending interest rate were positively related to agric GDP while credit to private sector was negatively related. Co-integration approach was also applied to determine the long-run relationship between the variables. The results revealed that the variables have a statistically significant impact on the agricultural sector in the long run. The study recommended that the apex bank should keep a close watch on exchange rate developments in order to enhance exchange rate stability which will contribute to the development of the agric sector.

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