THE ECONOMIC IMPLICATION OF OIL BOOM ON AGRICULTURAL EXPORTS TRADE INSTABILITY IN NIGERIA: AN EMPIRICAL STUDY

The central issues with which this study is concerned revolve around the major determinants of agricultural export instability in Nigeria. Specifically, the study examined the relationship between oil export and the agricultural export performance in Nigeria. In trying to achieve this objective, an ordinary least square multiple regression approach was adopted for the data analysis. Some statistical tools were employed to determine the statistical significant relationship between these variables. The analysis started with the test of stationarity and co-integration of Nigeria’s time series data. The empirical study found that the data were stationary and co integrated. The multiple regression results showed a significant but negative relationship between oil export and the agricultural export performance in Nigeria. These results were robust to a number of econometric specifications. Our findings and conclusion support the need for the government to diversify the oil sector and encourage agriculture through incentives to farmers, mechanization and positive policy measures. In complement of the above, it is important for the government to consolidate and maintain export incentives comprising a duty draw-back scheme, explicit export bonuses, currency retention scheme and other direct fiscal incentives (such as the exemption of export transactions from stamp duties).