MACROECONOMIC VARIABLES AND FOOD PRICE INFLATION IN NIGERIA (1980-2018)

Sakiru Oladele Akinbode, Jayeola Olabisi (), Chioma Patricia Adekunle and Olaide Mistura Jimoh

Journal of Rural Economics and Development, 2021, vol. 23, issue 01

Abstract: Despite the abundance of literature on general inflation, there is limited knowledge on the specific effects of macroeconomic variables on food inflation in Nigeria. The study examined the effects of key macroeconomic variables on food price inflation in Nigeria using data from 1980 to 2018 obtained from the World Bank and the Central Bank of Nigeria (CBN).Stationary tests revealed that some of the series were stationary at level i.e. I(0) while others were stationary at first difference i.e. I(1). Therefore, the data were analyzed within the ARDL framework. The bound test revealed the presence of long run relationship among the variables. Food production, exchange rate, money supply and crude oil prices were significant in the short run while all of these except food production were significant in long run. It takes about 1.1 years for the system to restore back to the long run equilibrium path in case of an external shock. Post estimation tests confirmed the validity of the model estimated. Measures aimed at ensuring increased food production such as provision of loan through guided increase in money supply and effective protection of the Naira against excessive depreciation are recommended.

Keywords: Agribusiness; Agricultural and Food Policy; Demand and Price Analysis (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ngjred:313621

DOI: 10.22004/ag.econ.313621

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