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Humboldt-Universität zu Berlin - Lebenswissenschaftliche Fakultät - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 3/09


Impact assessment of macroeconomic policies on the
supply of non-traditional export crops in Nigeria

Timothy Olukunle Oni
Nigerian Institute of Social and Economic Research, Ibadan, Nigeria


Abstract

Nigeria’s agricultural export has expanded to include non-traditional products. However, the country is now over-dependent on petroleum exports. It has, therefore, become necessary to diversify the sources of its foreign exchange earnings. In this connection, impact of some macroeconomic policy instruments on the supply of cassava and ginger was examined. Time series secondary data were used. The data included outputs of cassava and ginger. The policy variables included real exchange rate and interest rate. Data were analyzed using simultaneous equations regression model. Capital expenditure on agriculture had significant effect on ginger with coefficient of 0.03 at p<0.05. Interest rates on agricultural loans, with coefficient of -0.07, have significant effect on ginger supply at p<0.05. Real exchange rate with coefficient of 0.92 had significant effect on cassava supply at p < 0.05. Policy strategies to expand supply of non-traditional products include improved market linkages and maintaining stable macroeconomic policy environment.

Keywords: agricultural products, supply, impact, macroeconomic policy indicators, simultaneous equations model

JEL: Q11

Vol. 48 (2009), No. 3: 243-264