Analysis of trade liberalization policies on agricultural output growth in Nigeria (1960-2014)
The study was carried out to analyse the effect of trade liberalization policies on agricultural output growth in Nigeria, using time series data from 1960-2014.The objectives were to; estimate the differences in agricultural output before and after trade liberalization period and estimate the long and short-run effect of agricultural trade policies on agricultural output in Nigeria. Data for the empirical study were sourced from various issues of the Central Bank of Nigeria (CBN) statistical bulletin and publications of the National Bureau of Statistics (NBS). Both descriptive and
inferential statistics were used to analyze the data. The estimation procedure was the co-integration and error correction model. The analysis reveals that the mean agricultural output after trade liberalization (AGR GD2) was different from that of the pre-trade period (AGR GD1) and also the t-test result confirms that there exist a significant difference between agricultural output during the pre-trade and post-trade liberalization period given that the tcal (4.5146) was greater than the tcrit (2.0484) at 5% level of significance. The long–run and short-run regression results shows that trade openness and exchange rate had a negative effect on agricultural output in the three models meaning that trade openness will lead to reduction in agricultural output both in the long and short-run. The study therefore recommended that monetary authorities should adopt policies that will reduce the volatility of the exchange rate. Also the institution of import quota could curb the negative effect of trade openness on agricultural output growth in Nigeria.
Keywords: Agricultural output, Trade liberalization, Trade openness, long-run, Short-run