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Analyzing the Effects of Food Imports on Food Production and Balance of Payments in Nigeria

Author

Listed:
  • Ugwu Ephraim

    (Department of Economics, Federal University, Oye -Ekiti, Nigeria)

  • Efuntade Olubunmi

    (Department of Economics, Federal University, Oye -Ekiti, Nigeria)

  • Ehinomen Christopher

    (Department of Economics, Federal University, Oye -Ekiti, Nigeria)

Abstract

Research background: Past measures to increase food production in Nigeria, were not effective enough to curb food imports and increase food production thus leading to a deficit balance of payment for the country and a total neglect of the agricultural sector. Purpose: This study analyzes the effects of food imports on food production and Balance of Payments (BOP) in Nigeria from 1960 to 2020. Research methodology: The Auto Regressive Distributed Lag (ARDL) bound cointegration test procedure is utilized. Results: The empirical results show that food imports adversely affect food production both in the long and the short run. While for the BOP equations, food importation positively affected the country’s balance of payments in the long run. The short run error-correction term coefficients are signed negatively for both the food production and BOP equations. The results show that the gap between the equilibrium values and the actual value of the dependent variables are corrected with speed of adjustment equal to 40% and 85% annually. The stability test result on the food production equation showed that the null hypothesis of no stable residuals in both the short and long run are rejected, while the estimated model is not effective with stable recursive residuals for the BOP equation. Novelty: The study therefore recommends that efforts should be geared towards boosting the country’s food production by encouraging foreign investors’ participation in the agricultural sector.

Suggested Citation

  • Ugwu Ephraim & Efuntade Olubunmi & Ehinomen Christopher, 2022. "Analyzing the Effects of Food Imports on Food Production and Balance of Payments in Nigeria," Folia Oeconomica Stetinensia, Sciendo, vol. 22(1), pages 302-324, June.
    • Handle: RePEc:vrs:foeste:v:22:y:2022:i:1:p:302-324:n:5
    DOI: 10.2478/foli-2022-0015
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    References listed on IDEAS

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    5. Mabuza, Majola Lawrence & Hendriks, Sheryl L. & Ortmann, Gerald F. & Sithole, M.M., 2009. "The impact of food aid on maize prices and production in Swaziland," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(01), pages 1-21, March.
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    More about this item

    Keywords

    food-imports; food-production; BOP; ADRL; Nigeria;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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