THE IMPACT OF GOVERNMENT MACROECONOMIC POLICIES ON FOOD PRODUCTION IN NIGERIA (1980– 2010)
Abstract
Abstract
Purpose: An empirical analysis into the nexus between food production proxied by agriculture output, and government macroeconomic policies which encompasses the following explanatory variables; inflation rate (INFR), interest rate (INTR), exchange Rate (EXCR), credit to agriculture sector (CREAGR), government spending on agriculture sector in Nigeria (GOVEXPAGR) and foreign private investment in agriculture sector in Nigeria.
Method: The study adopted the Ordinary Least Square estimation technique to examine the relationship between agriculture food production (i.e agric output), exchange rate, inflation rate, credit to agriculture sector, foreign investment in agriculture sector and government expenditure on agriculture. The hypotheses were verified with the use of T-test and Fisher F-test of significance. Pre-estimation tests such as Unit Root test, Auto-correlation test (Durbin Watson test), Cointegration test, Causality test, Correlation test were carried to ascertain suitability of formulated models for robustness. Similarly, post-estimation tests such as Cumulative Sum of Squares of the residual (CUSUM Squares) Tests were carried out to ascertain the stability of the models for forecasting purposes.
Results: The findings showed that inflation rate in Nigeria is mild and increase agricultural productivity, although not statistically significant in the short run and not relevant in the long run. Also exchange rate and interest rate have direct relationship with food production which signifies that is the higher the exchange rate the higher would be the domestic agricultural output. In the same vein, government spending on agricultural sector and foreign private investment in agriculture sector have positive impact on the agricultural output and by implication, on food production in Nigeria. However, in the long run both foreign private investment in agriculture sector and government spending on the sector have inverse relationship which implies diversification of government fund and repatriation of profit and/or capital by foreign investors in the agriculture sector in Nigeria.
Implications: Current macroeconomic policies does not attract foreign direct investment in the Agriculture sector of Nigeria thus the sector experience deficit in project growth rate despite favourable government spending and macroeconomic policies.
Recommendation: Government should therefore engage agricultural stakeholders and put in place sound policies that would encourage foreign experts in the agriculture sector so that they can partner with Nigeria and Nigerians in order to enjoy the technological know - how in the sector. Exchange rate policy should be put in place to encourage exportation of agriculture output as well as to conserve foreign currency.
Keywords: food production, Government expenditure, Exchange rate, Interest rate, inflation rate, macroeconomic variables
Impact of Capital Mobilization on the performance of Agricultural Cooperatives Societies in Rivers State of Nigeria
Abstract
Abstract
This study sought to assess the relationship between capital mobilization among agricultural cooperatives in rivers State and their performance between 2004 to 2018 . The following were the independent variables employed for this study: share capital, savings deposit, thrift savings, external loan debt, loan outstanding, capital assets while the dependent variable performance of cooperative enterprises was proxied by net-worth. The study employed quasi-experimental research design due to its suitability for dealing with multivariate explanatory variable relationship with a singular dependent variable. The nature of the data were secondary data which were sourced from the books of accounts and records of primary cooperative societies within the study area. Six (6) Agricultural cooperative enterprises selected from eight (8) local government area randomly made up the sample that represented the population of the study. Collated data from the 48 agricultural cooperative enterprises was arrange in panel data form and was analyzed using both STATA and E-views 9.0 software. The Im, Pesaran and Shin (IPS) stationary test showed that the variables in the study were stable at first difference. Similarly, the Kao and Pedroni cointegration test confirmed the presence of long run relationship among the variables employed in the study. The models were subjected to Fixed Effect, Random Effect Linear regression and Hausman Test. The findings showed Agricultural cooperatives in Rivers State mobilize capital mainly through share capital, internal loans, capital assets and thrift savings. They performed poorly on special deposits, internal equity capital and external loans.It also revealed that the impact of share capital, thrift savings, outstanding loans and capital assets were positive and significant on the Net-worth (performance) of Agricultural cooperatives in Rivers State while the impact of saving deposit and external loan debt were insignificant, negative and positive respectively. Thus, we can conclude that the impact of share capital, thrift savings and outstanding loans were significant in improving the financial performance of Agricultural cooperatives in Rivers States. On the basis of the empirical findings, the study recommended that the Directors of Cooperatives in Rivers State should provide specialized training and workshop for Agricultural cooperatives to equip them with the knowledge on how to efficiently build up their equity capital consistently.
Keywords: Agricultural cooperatives, capital mobilization, networth, performance.
