MACRO ECONOMIC VARIABLES AND NIGERIA AGRICULTURAL TRADE FLOWS: A GRAVITY MODEL ANALYSIS APPROACH

The study examined the influence of macro-economic variables on agricultural trade flows between Nigeria and her trading partners. Time series data covering the period between 1970 and 2019 were used in the study. Data were analysed using descriptive statistics and a gravity model. Results of the descriptive analysis revealed a declining trend in earnings from agricultural exports, while expenditure on agricultural imports increased significantly, resulting in a deficit balance of agricultural trade in Nigeria over the study period. Results of gravity model analysis showed that exchange rate, agricultural export tax, Nigeria's Gross Domestic Product (GDP) and Nigeria's population positively influenced agricultural trade flows, while the distance between Nigeria and United Kingdom negatively influenced agricultural trade flows. The study concluded that bilateral agricultural trade between Nigeria and her trading partners in the study is elastic to exchange rate, agricultural export tax, Nigeria GDP, Nigeria population, and distance between Nigeria and United Kingdom. Thus, effective and efficient monetary and fiscal policies to monitor exchange and export tax in the economy and improved bilateral trade agreements will ensure a friendly macro-economic environment that will stimulate mutual benefits from agricultural trade for both partners.