Fig. 1.
Fig. 2.
Augmented Dickey-Fuller unit root test results
| Variable | ADF (level) | Crit. (5%) | ADF (1st diff.) | Crit. (5%) | Integration |
|---|---|---|---|---|---|
| L_PRODUCTION | −1.982* | −2.998 | – | – | I(0)* |
| L_IMPORTS | −2.456 | −2.998 | −4.823*** | −2.998 | I(1) |
| L_RESERVES | −2.345 | −2.998 | −5.156*** | −2.998 | I(1) |
| L_EXRATE | −1.876 | −2.998 | −4.234*** | −2.998 | I(1); DEXRATE = I(0) |
| L_GDP | −2.123 | −2.998 | −3.987*** | −2.998 | I(1) |
| DEXRATE | −4.567*** | −2.998 | – | – | I(0) |
ARDL bounds test for cointegration – domestic production model, ARDL(2,1,2,2,0)
| Test statistic | Value | Significance | I(0) lower bound | I(1) upper bound |
|---|---|---|---|---|
| F-statistic (k = 4) | 5.682 | 1% | 3.29 | 4.37 |
| 5% | 2.56 | 3.49 | ||
| 10% | 2.20 | 3.09 | ||
| Narayan (2005) small-sample I(1) ≈ 5.018 (5%, n ≈ 30, k = 4) | Cointegration confirmed. F (5.682) exceeds Pesaran et al. (2001) 1% bound (4.37) and Narayan (2005) small-sample 5% bound (~5.018). | |||
Long-run ARDL coefficients – domestic rice production model
| Variable | Coefficient | Std. error | t-statistic | Prob. | Decision |
|---|---|---|---|---|---|
| L_RESERVES | 1.684*** | 0.326 | 5.172 | 0.000 | Significant (+) |
| L_GDP | −0.340*** | 0.075 | −4.535 | 0.001 | Significant (−) |
| DEXRATE | −0.521 | 0.360 | −1.448 | 0.178 | Not significant |
| L_IMPORTS(−1) | 0.011 | 0.014 | 0.750 | 0.470 | Not significant |
| Constant | −14.328 | 7.701 | −1.860 | 0.093 | Marginal |
Descriptive statistics of study variables (2000–2023)
| Variable | Mean | Std. dev. | Min. | Max. | N |
|---|---|---|---|---|---|
| L_PRODUCTION (log mt) | 15.34 | 0.48 | 14.52 | 16.07 | 24 |
| L_IMPORTS (log mt) | 13.89 | 0.62 | 12.74 | 14.82 | 24 |
| L_RESERVES (log USD) | 24.15 | 0.42 | 23.31 | 24.85 | 24 |
| L_EXRATE (log NGN/USD) | 5.42 | 0.94 | 4.62 | 7.33 | 24 |
| DEXRATE (first difference) | 0.098 | 0.174 | −0.156 | 0.514 | 23 |
| L_GDP (log constant LCU) | 25.68 | 0.32 | 25.12 | 26.19 | 24 |
Summary of key empirical studies: foreign exchange, trade, and rice production in Nigeria
| Study | Period / context | Method | Key finding | Gap addressed here |
|---|---|---|---|---|
| Nkang et al. (2006) | Nigeria; pre-2006 | ECM | Long-run macro-production cointegration confirmed for rice sector | Outdated; no reserve variable; pre-depreciation era |
| Ammani (2013) | Nigeria; 1986–2010 | OLS regression | FX availability positively associated with rice output; elasticity 0.6–0.8 | No cointegration test; does not cover 2018–2023 FX crisis period |
| Ekundayo (2023) | Nigeria; time-series | ARDL | Long-run rice production-imports-GDP relationships confirmed | Reserve adequacy not isolated; no ECM adjustment speed reported |
| Edwards et al. (2023) | Nigeria; qualitative | Fuzzy cognitive mapping | Input supply chains and macroeconomic conditions identified as critical system drivers | No quantification; causal elasticity not established |
| Akinsola et al. (2025) | Nigeria; recent | Regression | Rice importation affects domestic production through substitution dynamics | FX reserve channel and cointegration not examined |
| This study | Nigeria; 2000–2023 | ARDL + ECM | Reserve elasticity = 1.684 (binding constraint confirmed); 79% annual ECM adjustment | – |
Error correction model – short-run dynamics, ARDL(2,1,2,2,0)
| Variable | Coefficient | Std. error | t-statistic | Prob. |
|---|---|---|---|---|
| CointEq(−1) | −0.790*** | 0.111 | −7.151 | 0.000 |
| D(L_PRODUCTION(−1)) | −0.556*** | 0.103 | −5.383 | 0.000 |
| D(DEXRATE) | −0.077 | 0.096 | −0.804 | 0.440 |
| D(L_RESERVES) | −0.382 | 0.366 | −1.043 | 0.322 |
| D(L_RESERVES(−1)) | −0.514 | 0.468 | −1.100 | 0.297 |
| D(L_GDP) | −0.152** | 0.050 | −3.019 | 0.013 |
| D(L_GDP(−1)) | 0.172*** | 0.053 | 3.236 | 0.009 |
| R2 = 0.861 Adj. R2 = 0.806 | BG serial correlation: F = 0.526, p = 0.604 ✓ | BPG heteroskedasticity: F = 0.545, p = 0.787 ✓ | ||
Variable definitions, data sources, and a priori expected signs
| Variable | Definition | Source | Unit | Expected sign |
|---|---|---|---|---|
| DEXRATE | Δln(EXRATEt) = ln(EXRATEt) − ln(EXRATEt−1): annual % depreciation approximation; I(0) by construction (ADF: −4.567***) | World Bank/CBN | Change | Negative (−): depreciation raises naira cost of imported inputs |
| LNRES | Natural log of foreign exchange reserves (USD millions) | World Bank/CBN | Log USD | Positive (+): reserves enable sustained input procurement |
| LNGDP | Natural log of real GDP (constant local currency units) | World Bank | Log LCU | Ambiguous (±); negative expected for oil-dependent economy per Dutch disease mechanism |
| LNIMP(−1) | Natural log of lagged rice import volumes; one-period lag reduces simultaneity bias | FAO | Log mt | Ambiguous (±) |