MODELLING OF THE LONG RUN IMPACT OF EXPORTS AND IMPORTS ON FOREIGN EXCHANGE RESERVE INFLOW IN NIGERIA
Keywords:
ARDL, Cointegration, Causality, Stationarity, Bounds testAbstract
This study examined the long run relationship and causality among exports and imports data as explanatory variables to foreign reserves inflow into the Nigeria’s economy from January 2008 to December 2018 using Autoregressive Distributed Lag (ARDL) Bounds test approach to cointegration. The secondary data was obtained from the Central Bank of Nigeria. A unit root test of stationarity of the series returned all three series to be I(1) stationary. Bounds test result shows that there is cointegration among the variables specified in the model. The optimal lags specification returned ARDL (3, 0, 0) as overall best fitting model for monthly inflow of Foreign reserves. The speed of adjustment to long run equilibrium of 22.15% is significant to minimized distortions in the long run. The causality result highlights the crucial role exports trade plays in the accumulation of foreign reserves. Diagnostics checks on the model provided no significant evidence of serial correlation or presence of instability in the estimated coefficients at 5% significance level. The study recommends that Policy Makers should ensure definite steps are taken to diversify the country’s export trade so as to spur external reserves inflow, this will give the Country worthiness in the international market and leverage in times of economic crises thereby stabilising the economy, a stable economy will attract foreign direct investments which will further boost infrastructural development and in a long run a better living standard of the citizenry.
References
Abba, A. and Shehu, M. (2007). Commodity Chain Analysis of Tomato: Case Study of KRIP Area, Kano State. Agricultural Development in Nigeria Programme. A collaborative Programme of NAERLS/ABU, Zaria and Embassy of France Abuja.
Adamu, B. I. (2005). Small and Medium Industries Equity Investment Scheme (SMEESIS): Pro or Anti-Industrialization; Bullion, 29(4): 32.
Adeyemo, R.J, Oke T.O. and Akinola A.A. (2010). Economic Efficiency of Small Scale Farmers in Ogun State, Nigeria Tropiculture. 28(2).
Ataboh, E. (2007). Technical and Allocative Efficiency of Rice Production in Kogi State, Nigeria Unpublished M. Sc. Dissertation. Department of Agricultural Economics University of Agriculture, Makurdi, Benue State.
Ajibolade, E. O. (2005). Effects of Land Acquisition for Large Scale Farming on the Productivity of Small Scale Farming in Okitipupa L.G.A, Ondo State. Unpublished M. Sc. Thesis, Department of Agricultural Economic and Extension, FUTA, Akure.
Avkiran, N.K. (1999). An Application Reference for Data Envelopment Analysis in Branch Banking: Helping the Novice Researcher. International Journal of Bank Marketing. 17(5): 206 – 220.
Ayinde, O.E, Adewumi, M.O. and Omotosho, F.I. (2009). Effect of Fertilizer Policy on Crop Production in Nigeria. The Social Science. 4(1): 53-58.
Bakari, U.M. and Usman, J. (2013).Profitability of Small Scale Dry Season Tomato (Lycopersicon esculentum Mill.) Production in Adamawa State, Nigeria. ARPN Journal of Science and Technology.3 (6):604-612.
Benjamin, C.A, Simon, T.P. and Wuraola, L.L. (2011). Application of Data Envelopment Analysis to Evaluate Farm Resource Management of Nigerian Farmers. Journal of Agricultural Science. 2(1): 9-15.
Charnes, A, Cooper, W.W. and Rhodes, E. (1978). Measurement of the Efficiency of Decision Making Units. European Journal of Operational Research. 2(6): 429-444.
Dhungana, B.R, Nuthall, P.L. and Nartea, G.V. (2004). Measuring the Economic Inefficiency of Nepalese Rice Farms Using Data Envelopment Analysis. The Australian Journal of Agricultural and Resource Economics. 48(2): 347–369.
Frederick, K.D. (1992). Managing Water for Economic, Environment and Human Health. In: Damstadfer, J.(ed). Global Development and Environmental Perspectives on Sustainability: Resources for the Future, Washington D.C. Pp 67-68.
Haruna, U. (2004). Prospects and Problems of Vegetable Production under Irrigation in the Fadama Areas of Bauchi State, Nigeria. Horticultural Society of Nigeria, Proceedings of the 22nd Annual Conference.
Hadejia Jama’are River Basin Development Authority (HJRBDA, 2013). Brief on Kano River Irrigation Project (KRIP), Phase I.
Ibabu, S.C, Nwas, B.T. and Traxer, G.J. (1996). Irrigation Development and Degradation in Developing Countries: A Dynamic Model of Investment Decisions and Policy Options. IFPRI Paper. 337: 1-15.
Jaliya, M. M, Sani, B. M, Lawal, A. O. and Murtala, G. B. (2007).Effect of Irrigation Frequency on Productivity of Heat Tolerant Tomato Varieties at Samaru, Zaria, Agricultural Engineering and Irrigation Programme, NAERLS/ABU, Zaria 13thNational Irrigation and Drainage Seminar, Minna. Pp. 105-108.
Kano State Government (2012). Brief on Kano State. kano.gov.ng/new/index.php/2012-02-28-03-51-05/brief. Accessed on 10th January, 2013.
Lucas, S. R. (2012). "Beyond the Existence Proof: Ontological Conditions, Epistemological Implications, and In-Depth Interview Research.", Quality and Quantity, doi: 10.1007/s11135-012-9775-3
Muhammad, L.A. and Atte, O.A. (2006) Analysis of Agricultural production in Nigeria. African Journal of General Agriculture. 2(1)
Murthy, D.S, Sudha, M, Hegde, M.R. and Dakshina, M. (2009). Technical Efficiency and its Determinants in Tomato Production in Karnataka, India: Data Envelopment Analysis (DEA) Approach. Agricultural Economics Research Review.22: 215-224.
Nasiru, M.O. (2010). Microcredit and Agricultural Productivity in Ogun state, Nigeria.World Journal of Agricultural Sciences. 6(3): 290-296.
NPC (2006). National Population Commission. Population Census of the Federal Republic of Nigeria. 2006 Census Report National Population Commission, Abuja.
Ojo, E.O. and Adebayo, P.F. (2012). Food Security in Nigeria: An Overview. European Journal of Sustainable Development. 1(2): 199-222.
Olanrewaju, D. and Swarup, V. (1983).Tomato Cultivation and it’s Potential in Nigeria. National Horticultural Research Institute, Idi-Ishin, Ibadan, Nigeria, Occasional Paper No. 10 ISSN 0795-4123.
Okoruwa, V. O, Akindeinde, A. O. and Salimonu, K. K. (2009). Relative Economic Efficiency of Farms in Rice: A Profit Function Approach in North Central Nigeria. Tropical and Subtropical Agro-systems. 10: 279-286.
Oviasogie, D. I. (2005). Productivity in Yam-Based Farming System in Edo State, Nigeria. M. Sc. Thesis, Department of Agricultural Economics, FUTA, Akure.
Pierce, J. T. (1990). The Food Resource: Themes in Resource Management, Longman Group Ltd. London, U.K. Pp 226.
Rayeni, M.M., Vardanyan, G. and Saljooghi, F.H. (2010).The Measurement of Productivity Growth in the Academic Departments using Malmquist Productivity Index. Journal of Applied Sciences.10 (22): 2875-2880.
Sekumade, A. B. And Toluwase, S.O. W. (2014) Profitability and Production Efficiency of Indigenous Tomato Cultivation among Farmers in Osun State, Nigeria IOSR Journal of Agriculture and Veterinary Science (IOSR-JAVS). 7(11):13-23.
Shankara, N, Joep Van Lidt, D. J, Marja, D. G, Martin, H. and Barbara, V. D. (2005). Cultivation of Tomato: Production, Processing and Marketing, Agrodok 17, Agromisa Foundation and CTA, Wageningen.
Sufian, F. (2007). Bank Mergers Performance and the Determinants of Singapore Banks Efficiency. Gajah Mada International Journal of Business.9 (1):19–29.
Published
How to Cite
Issue
Section
FUDMA Journal of Sciences
