Impact of Sub-Regional Integration on Regionalization and Volume of Agricultural Trade within the ECOWAS Sub-Region

Economic Community of West African State (ECOWAS) regional trade agreement established long time ago was assessed to evaluate the level of agricultural products trade within the region. Specifically, the study was to: describe the volume and direction of trade; estimate the degree of ECOWAS regionalization; and assess the effects of ECOWAS regional characteristics on intra-ECOWAS trade of agricultural products. This was achieved by using analytical tools such as descriptive statistics, trade intensity index and gravity model. The results of intra-ECOWAS import and export of all agricultural products stood at 4.56 billion and 8.58 billion US dollars, which accounted for 6.38% and 15.46% of the total commodities, respectively. The trade intensity index results in terms of import indicated 41.9% values less than one while 57.1% had values greater than one for the period 2001 to 2011. In the case of export trade intensity index, the results was said to be fair with  49.5% had trade intensity index values less than one while about 49% paired countries had trade intensity index greater than one. Gravity equation regressions results indicated GDPs,   distance, infrastructure, contiguity, landlocked and usage of common official language as significant explanatory variables in the import trade in the region. The results suggested that the trade pattern in the region follows the economic size or resource endowment and obeys Linder’s theory. The study therefore recommends that emphasis be made in eliminating non-tariff barriers and re-formulation of trade policy that will harness more of resource endowment in the region. Keywords: ECOWAS; Agricultural products; regionalization; trade agreement

Do Regional Characteristics and Sub-regional Integration Matter in Intra-ECOWAS Trade on Livestock Products?

The purpose of this paper is to empirically analyze the trade potentials in the West African region. It starts with review of livestock products import and export within and outside the region and the bilateral strength of livestock trade regionalism was also tested using trade intensity index. Also the effects of WAEMU sub-regional integration and ECOWAS regional characteristics on intra-ECOWAS trade were assessed using the gravity model. This was achieved by employing panel data for the period of 11years (2001-2011). The results suggest high import than export of livestock products within and between regions. The level of trade regionalization was relatively high in WAEMU sub-region than ECOWAS region. The traditional gravity variables were consistent with the gravity theory. Also the alternative hypothesis that trade blocs, economic and geographical variables did significantly influence trade in the sub-region was accepted at 1% probability level. The study therefore, recommends that more efforts be made to remove non-tariff barriers in order to promote intra-ECOWAS trade on livestock products since trade diversion was noticed

Response of Cocoa Export Market to Climate and Trade Policy Changes in Nigeria

This study examined the response of cocoa export market to climate and trade policy changes in Nigeria. Specific objectives were to describe the trend in cocoa export market and climate/trade policy changes in Nigeria; analyze the level effects of climate change in cocoa productivity arising from farmland area and labour changes, analyze the effects of cocoa productivity and trade policy changes on cocoa export market in Nigeria; forecast the possible future changes in cocoa export market due to climate and trade policy changes; and  make policy recommendations based on the research findings. For the purpose of this study, secondary data were used. A comprehensive trend in cocoa export market and climate/trade policy changes was described. A 2-stage Least Square Dynamic Panel Regression Model was used to address cocoa production and export responses, respectively, while a Monte Carlo simulation test was used to simulate, under various climate and trade/price policy scenarios, for possible climate and trade policy impacts on future cocoa output and export. It was observed that the Nigerian cocoa export market has been fluctuating and would likely continue over time. It was also observed that there has been consistent fluctuation in temperature and precipitation although relatively smaller in comparison to the export market fluctuations but still significant since a minimal increase or decrease in these climate change variables could have a significant impact especially in agriculture compared to trade policy influencing factors. The Monte Carlo simulation test recorded a slight level of relationship between cocoa output/export and climate/trade policy variables. This implies that a 10% increase or decrease in these variables, would have slight effects on cocoa output/export in Nigeria. Based on the findings, it was recommended, among others, that there should be a trade-off between trade policy gains and losses due to forest conversion as a result of cocoa hectarage expansion

Theoretical, Analytical, and Methodological Issues on Regional Integration and Bilateral Trade in the ECOWAS Sub-Region: Evidence from Literature on the Gravity Model of Trade

ECOWAS has been enforcing sub-regional integration through free international trade, common external tariff wall, consolidation or freezing of customs duties, non-tariff barriers to intra-trade and gradual phasing out of duties on industrial products from community projects over a period of 6-10 years at 10-16.6% annual rates of reduction depending on the classification of member states based on the level of development, location, and importance of customs revenue. However, comparatively few studies used the gravity model to explore empirically the determinants of intra-regional trade among countries in SSA, on one hand, and between the countries of regional groupings on the other hand. Some of the studies produced significant effects of the impact of regional groupings on bilateral trade in member countries, while others account for less. This paper tries to document theoretical, analytical, and methodological discuss on the topic in the context of augmented traditional gravity model of trade

Price Transmission and Integration of Rural and Urban Rice Markets in Nigeria

This study was designed to analyze the degree and determinants of market integration in rural and urban rice markets in Nigeria using evidence from Enugu State. Issues considered include: level of rice market integration via price movements, structural factors that affect the integration of rice markets and, the problems affecting rice traders in the state. Forty wholesalers and forty retailers were selected for the study. Primary and secondary data were collected and analyzed using co-integration analysis, market integration function and descriptive statistics. Unit Root Test showed that rural and urban prices were stationary at first differencing and were integrated of the order zero, 1(0).  Rice markets in the study area were integrated but the level of integration was low. The Vector Error Correction Model had a coefficient of -0.0061872 which was significant at 1% level and was negative. The Market Integration Function had Coefficient of Determination (R2) of 0.78 showing that the independent variables explained about 78% of the variations in the prices of rice in the rural and urban rice markets. Transportation cost, toll fee, processing cost and storage cost significantly affected the level of market integration. The greatest problems encountered by the rice traders were inadequate finance, high transportation costs/bad roads and poor quality of local rice compared to foreign rice. To improve the level of market integration; transportation, processing, storage, communication and credits facilities should be provided

An Investigation into Credit Receipt and Enterprise Performance among Small Scale Agro Based Enterprises in the Niger Delta Region of Nigeria

The study was designed to analyze credit receipt and enterprise performance by small scale agro based enterprises in the Niger Delta region of Nigeria. A multistage sampling technique was adopted in selecting 264 agro based enterprises and 96 agro based enterprises that accessed informal and formal credit respectively. The Heckman model was used to examine the factors affecting amount of informal and formal credit received by the enterprises. Financial ratios such as the current ratio and return on capital employed ratio were used in addition to the t-test to examine the performance of enterprises that borrowed from informal and formal credit markets in the area. Analyses of informal credit amount received reveal that gender, age and social capital are significant for the first hurdle, whereas gender, size, income, guarantor and social capital are significant for the second hurdle. Similarly, gender, education, age, size, and collateral are significant for the first hurdle for formal credit, while the second hurdle reported significant results with age, size, income, collateral and social capital. Formal credit was less accessible than informal credit but enhanced greater performance. Formal credit should be made to be easily accessible and efficiently utilized. This will go a long way in complementing the amnesty programme of the federal government of Nigeria in the region

What Determines the Frequency of Loan Demand in Credit Markets among Small Scale Agro based Enterprises in the Niger Delta Region of Nigeria? An Empirical Analysis

The study was designed to determine the frequency of loan demand in credit markets among Small Scale Agro based Enterprises in the Niger Delta Region of Nigeria. A multistage sampling technique was adopted in selecting 264 agro based enterprises and 96 agro based enterprises that accessed informal and formal credit through the use of structural questionnaire and oral interview. A total of 360 respondents selected were used for the study.  Structural characteristics of the enterprises were described using descriptive statistical tools such as percentages, means and frequencies. The poisson regression model was employed to examine the factors affecting frequency of informal and formal credit access by the enterprises. Poisson regression analyses showed that experience in borrowing, income, guarantor, social capital and non agro based income significantly influence frequency of informal credit access, whereas, education, Interest, collateral, and non-agro-based income significantly influence frequency of formal credit access. Education is a significant factor influencing frequency of formal credit demand; therefore, entrepreneurs should be encouraged to enroll in evening programmes, and should take advantage of the current free education policy of some of the state governments in the region. Agro-based entrepreneurs should be encouraged to form community based advocacy groups where groups act as a surety for lenders. This will enhance credit access and prompt repayment

Trade Liberalization, Exchange Rate Changes, and the Competitiveness of Carbohydrate Staple Markets in Nigeria

This study examined the effects of trade liberalization and exchange rate changes on carbohydrate staples in Nigeria. Secondary data published from 1974 to 2006 on cassava exports and rice imports as well as non-tradable carbohydrate staples were used. It was hypothesized that exchange rate changes and trade liberalization via price relatives, trade intensity and nominal protection coefficient have affected prices of carbohydrate staples in Nigeria. Results show that the effects of trade liberalization on prices of non tradable carbohydrate staples were mixed. Trade liberalization accounted for most changes in the price of non tradable rice than other crops. World prices positively affected the prices of maize and non tradable rice. Also increasing exchange rate will lead to increase in price of non tradable rice due to price competition with imported rice. The intensification of liberalization exercise from the removal of quantitative restriction to use of tariff, among other recommendations, should be encouraged because it can be a remedy to the negative impact of increase in the trade intensity and erosion of nominal protection coefficient on prices of the non tradable crops

AN ANALYSIS OF ACCESS TO CREDIT MARKETS AND THE PERFORMANCE OF SMALL SCALE AGRO- BASED ENTERPRISES IN THE NIGER DELTA REGION OF NIGERIA

The study was designed to examine access to credit markets and performance by small scale agro-based enterprises in the Niger Delta. A multistage sampling technique was adopted in selecting 264 and 96 agro-based enterprises that accessed informal and formal credit respectively through the use of structured questionnaire and oral interview. The logit model was used to examine the factors that had significant influence on credit access by the enterprises in the region. Results revealed that the factors that significantly influence informal credit access by small scale agro-based enterprises are Gender, Age and Social Capital, while factors that influence formal credit access are Education, Age, Enterprise size and Collateral. Majority of enterprises accessed informal credit but the few that accessed formal credit performed better. Government should ensure easy access to formal finance by small agro-based enterprises in the region as they are the engine of economic development

THE IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON AGRICULTURAL GROWTH IN NIGERIA (1979-2014)

This study examining the impact of foreign direct investment (FDI) and other macroeconomic variables on agricultural growth in Nigeria from 1981 to 2014, using annual time series data from Central Bank of Nigeria (CBN), World Bank and the United States of America (US) Federal Reserve System. Data was analysed using trend analyses, unit root tests, co-integration tests, ordinary least squares (OLS) regression and Granger causality tests, while the hypothesis was tested with F-test. Results revealed very low FDI inflow into agriculture, not commensurate with the share of agriculture to GDP. All significance were taken at the 5% probability level, i.e. p<0.05. There was positive non-significant relationship between agricultural growth and FDI in agriculture, meaning that FDI in agriculture has no direct impact on agricultural growth or the impact on agricultural growth is masked by other macroeconomic variables. Significant positive relationship exists between agricultural growth and macroeconomic instability, while interest rate differential had a significant negative relationship. There was unidirectional causality running from FDI in agriculture, stock of gross external debts, and variability of consumers’ price index to agricultural growth, while agricultural growth was significant in granger causing macroeconomic instability. Recommendations are government should not involve itself in business, but seek for and encourage more FDI for the agricultural sector, encourage joint ventures between foreign and domestic investors/entrepreneurs, ensure stability and consistency in its macroeconomic policies, while monetary policy rates should be fixed in such a way that it would attract the right amount of investments in agriculture