Responsiveness of selected agricutural export commodities to exchange rate devaluation in Nigeria: an econometric analysis

Abstract

The key focus of this paper was to estimate the responsiveness of selected agricultural export commodities to changes in the exchange rate in Nigeria over the 1974-92 sample period. This study was considered as relevant and topical to the exchange rate liberalisation adopted in 1986, which was intended in part to diversify the export base of the country. The results obtained suggests that, with the exception of natural rubber, the export elasticities for the commodities studied (cocoa, palm kernels, and processed/semi-processed products) were generally of low order even in the longrun. The low elasticity estimates were interpreted as suggesting potentially limited volume of agricultural export earnings in response to the devaluation of the local currency (The Naira). The need to periodically revise these estimates in the light of new information about agricultural tradables was emphasized.