Does Real Effective Exchange Rate Matters for Agricultural Output in Nigeria? A Cointegration Approach

Aims: The paper empirically investigated the Real Effective Exchange Rate and agricultural productivity in Nigeria.

Study Design: Case study.

Methodology: The cointegration technique with its implied ECM was applied to estimate the data which covered the period between 1980 and 2011.

Results: The result shows that the Real Effective Exchange Rate has significant impact on the level of agricultural output in Nigeria. The result shows that the prices of exports and real agricultural exports have positive and significant impact on agricultural output. The result also showed a satisfactory speed of adjustment.

Conclusion: The study shows that the Real Effective Exchange Rate matters for agricultural output in Nigeria. The result thus recommends policy to stabilize the Real Effective Exchange Rate to facilitate improvement in agricultural output.