Strengthening Nigeria’s Weak Economy; Does Agricultural Exports Really Matter? Evidence from Cotton Seed Exports

Abstract

Following recent weakness in Nigeria’s economy, this paper examines how to possibly strengthen the weak economy through agricultural exports particularly cotton seed exports. The paper combines data on yearly cotton seed exports in Nigeria over 46 years (1970-2015) with data on the determinants to examine the relevant variables. Co-integration approach was used in analyzing the data to examine the presence of a co-integrating relationship between the variables in the short and long run. There are two main results from the study. First, the export of cotton seed in Nigeria within the study period was low and fluctuating apart from the 70s when it was high and stable. Second, there was Co-integration relationship between cotton seed export and macroeconomic factors during the study period in Nigeria as it indicated that producers’ price, exchange rate and output are long-run determinants of cotton seed exports. The results therefore indicate that commitments to policies and programmes that can favour
determinants of cotton seeds exports in Nigeria are calls certainly in the right direction to strengthen its weak economy. These include the provision of export incentives such as removal of stamp duties from export trade, provision of explicit export bonuses, aligning producer price with export price as well as encouraging private sector inclusion through the provision of an enabling environment for the private sector to flourish and get involved in the strengthening of the weak economy. The paper has contributed to agricultural development policy implications connected with agricultural export programs for the government, investors, exporters and farmers in Nigeria.