Policy Somersault and Wheat Importation in Nigeria, 1980-2017: Who Bears the Brunt?

Abstract

This study analyzed the effects of policy instruments on wheat importation in Nigeria. Annual time series data covering a period of (1980-2017) were analyzed using the vector error correction model (VECM). Results revealed that public investment, money supply, and interest rate in the previous year were negative and significant at 1% and 10%, respectively, on wheat importation and decreased wheat importation by 0.22%, 0.02%, and 2.02%, exchange rate and inflation rate in the previous year were positive and increased wheat importation by 0.24% and 1.16% respectively. In the short run, the results showed that the exchange rate in the previous year was negative and significant at 1% on wheat importation and decreased wheat importation by 0.71%. In comparison, the inflation rate was positive and significant at 1% on wheat importation and increased wheat importation by 0.33%. This study shows that policy instruments contributed to wheat importation sub-optimally during the period under review. The study, therefore, concludes that policy instruments played significant roles in food importation in Nigeria.