Exchange Rate Management and Agricultural Sector Performance: Evidence From Nigeria.

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Osobase A. O.
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Faculty of Social and Management Sciences, Air Force Institute of Technology, Kaduna.
Globally, the goal of any economy is to stabilize her exchange rate in order to attain favorable balance of trade when trading with other countries. For this reason, exchange rate is very significant to every nation. In this regard, the Nigeria economy has implemented both fixed and floating exchange rate regimes to achieve this goal. However, over the years, this has proved unsuccessful, as the national economy persistently performs poorly. Based on the aforementioned, this study seeks to examine the relationship between exchange rate management and agricultural sector performance in Nigeria. Specifically, it investigates the impact of real effective exchange rate on agricultural sector output in Nigeria using time series data from 1981-2019. The variables of interest include output of agricultural sector, real effective exchange rate, foreign direct investment, money supply and loan from agricultural and guarantee credit scheme fund. The data is analyzed using descriptive statistics and inferential techniques. Findings from the short-run VECM test, shows that lagged value of agricultural sector output, real effective exchange rate, loan from agricultural and guarantee credit scheme and foreign direct investment have positive and significant impact on share of agricultural sector output to real gross domestic product in Nigeria. In addition, the Granger causality test shows that there is a unidirectional causality that runs from real effective exchange rate to output of agricultural sector without a feedback effect. Based on the findings, it is recommended that the exchange rate regime that will foster the performance of the agricultural sector in terms of her contribution to economic growth should be pursue.
Scholarly article
Osobase, A.O. (2021).Exchange Rate Management and Agricultural Sector Performance: Evidence From Nigeria. Afit Journal of Social and Management Science, 1(1), 283-294.