Effect of Naira redesign on agricultural output in Nigeria (1981- 2022)

Abstract

The effect of naira redesign on agricultural output in Nigeria from 1981-2022 was examined using the ordinary least squares (OLS) with  annual secondary data sourced from Central Bank of Nigeria Statistical Bulletin and Index Mundi Database. It employed money supply,  exchange rate and inflation rate as a proxy for naira redesign. The annual data used cover the period of 1981 – 2022. Unit root test  showed that Inflation rates was found to be stationary at level I (0). Agricultural output and Exchange rate were found to be non- stationary at level but stationary after first difference I (1) while Money supply was stationary after the second difference, I (2). The  Johansen cointegration test showed that there exist Cointegration among variables and the equations at 0.05 level. The ordinary least  squares Regression result showed that exchange rate and inflation rate had a negative impact on agricultural output in both short and  long-run. Then, the study also found that money supply had a positive impact on agricultural output in the long run in Nigeria. It was concluded that naira redesign had both positive and negative impact on Agricultural output in Nigeria. It is therefore recommended that  government should increase the supply of money to increase Agricultural output in Nigeria.