EFFECT OF EXCHANGE RATE ON CASSAVA PRICES IN NIGERIA
- Boniface N. Mbam
- Bernard Eze Nnabu
- Simon U. Nwibo
- P.N. Egwu
- ( paper pages. 1 - 24 )
Abstract
This study examined the influence of exchange rate on cassava pricesusing the Johansen co-integration approach and the Vector ErrorCorrection technique on time series data collated from 1991 to 2015.The unit root tests using Augmented Dickey-Fuller (ADF) found thatall the variables were non-stationary at level form but stationary afterfirst difference. The study established that exchange rate hasinsignificant effect on cassava prices in the short run but leads todecline in cassava prices in the long run. Also, it indicated that theprices of rice and yam strongly influence cassava prices both in theshort run and in the long run. In view of these findings, the studyrecommended the adoption of a special exchange rate that is belowthe official benchmark to favour the import of farm inputs, therestriction of foreign exchange access for importation of cassava-related food products and a lowering of the inflation rate to boostcassava farmers’ confidence in the economy. These measures willenhance cassava production and invariably lower the prices ofcassava in Nigeria.
Citation
Boniface N. Mbam, Bernard Eze Nnabu, Simon U. Nwibo, P.N. Egwu.
2020.
"EFFECT OF EXCHANGE RATE ON CASSAVA PRICES IN NIGERIA"
The Nigerian Journal of Economic and Social Studies,
62 (2): 1 - 24.
JEL Classification
E3, E31, O24, P42, Q11
