Determinants of Agricultural Export Supply Response in Nigeria: Time Series Evidence

This study examines the determinants of agricultural export supply response in Nigeria using time series econometric methods, providing original estimates of the price and non-price elasticities of export supply for major agricultural commodities. Understanding how Nigerian agricultural exports respond to price incentives, exchange rate changes, domestic demand pressures, and supply constraints is essential for designing effective agricultural export promotion policies. This study uses annual time series data for cocoa, sesame, cashew, groundnut, and rubber exports from the Central Bank of Nigeria Statistical Bulletin and NAERLS export data from 1990 to 2023. Nerlove partial adjustment and bounds testing ARDL models are applied to estimate short-run and long-run supply response elasticities. Variables include export price, domestic price, real exchange rate, rainfall, and infrastructure quality proxies. Findings reveal significant differences in supply response across commodities. Cocoa shows relatively low short-run price elasticity of 0.31 due to perennial crop production constraints, but higher long-run elasticity of 0.68. Sesame shows high short-run elasticity of 0.74, reflecting its annual crop nature. Exchange rate depreciation shows consistently positive export supply effects across commodities. The study contributes original commodity-specific supply response estimates for Nigerian agricultural exports and recommends exchange rate policy stability as a priority for agricultural export promotion.

Keywords: agricultural exports, supply response, Nigeria, ARDL model, exchange rate.