Exchange Competitiveness on Cocoa Production From Rate And Nigeria Agricultural 1970 To 2014

Abstract

This Research assessed the exchange rate and agricultural competitiveness of cocoa production in Nigeria from 1970 to 2014 with a view to empirically investigate the relationships between exchange rate and agricultural competitiveness of cocoa production in Nigeria. This research is particularly imperative considering the observations from various scholars that the problem in cocoa sub-sector is not only being less competitive but also less profitable. There have been fluctuations over the years and there is no meaningful statistical approach to investigate the causes of such fluctuations between 1970 and 2014. The specific objective of the study were to describe cocoa output trends in Nigeria, examine Nigeria’s exchange rate fluctuations and cocoa output, estimate and compare the competitiveness of cocoa beans in Nigeria and determine factors that drive cocoa competitiveness in Nigeria. The research covered a period of 44years from 1970 - 2014. Secondary data used for the study were collected from Food and Agriculture Organization Statistical data (FAOSTAT), and Central Bank of Nigeria. Data were analyzed using descriptive, Market share Index and Multiple regression analyses.. According to the result of this research. The regression analyses show that the SAP period had the highest R2 of 60% which was significant at (p<0.01). A number of factors significantly influenced competitiveness in the study, namely, world prices of cocoa beans (p<0.01), producer's prices of cocoa beans (p< 0.10), domestic cocoa output (p<0.10) and exchange rate (p<0.01). This implies that the higher the producer price, world price, domestic cocoa output and favourable exchange rate, the higher the competitiveness of cocoa beans in Nigeria. It was also observed that Nigeria's cocoa beans output and exchange rate have been uncertain and would likely continue overtime if measures are not taken to address the menace. In spite of the lapses observed in the country’s cocoa beans performance over the years, the result of this research suggests that there is potential for further improvement. However, this study recommends that more could be achieved through the establishment of industries that are into processing of cocoa beans to finished goods, and by tightening loose borders and setting-up an encouraging producer price to farmers in order to reduce cocoa beans smuggling. Continuous government support to the subsector and through timely adjustment of the exchange rate system would also help to keep the competitiveness high.