Macroeconomic Impact of Agricultural Commodity Price Volatility in Nigeria

Adeyemi A. Ogundipe1, *, Omobola Adu1, Oluwatomisin M. Ogundipe1, Abiola J. Asaleye2
1 Department of Economics and Development Studies Covenant University, Ota, Nigeria
2 Department of Economics, Landmark University, kawara, Nigeria



The Nigerian economy has remained consistently heavily dependent on earnings from commodity exports which constitute over 95% external earning and 85% of budgetary and fiscal financing. Agricultural commodity exports have witnessed a significant price swings in the international market in the past few decades resulting in food price hike and macroeconomic distortions in economies heavily dependent on food imports.

Methods and Materials:

The study assesses the macreoconomic impact of agricultural commodity price volatility in Nigeria from 1970-2017 using Autoregressive Distributive Lag (ARDL) cointegration and Impulse-Response Function (IRF) analysis. The study adopted an atheoretical statistics to ascertain the evidence of swings in macroeconomic aggregates.


There was evidence of persistent fluctuations in the macroeconomic variables observed, implying that external price shocks exert a significant impact on the macroeconomic management, since bulk of national budgetary and fiscal financing is from commodity exports.


The study found that volatile agricultural prices were responsible for a meager 2% of macroeconomic fluctuations. The empirical evidence corroborates the statistics showing that the share of agriculture in primary commodity exports has consistently remained less than 3% since the advent of crude oil. Furthermore, the study found that the swings in agricultural prices impacts foreign reserves and inflation more significantly and earlier in the time horizons than other macroeconomic aggregates.

Keywords: Agricultural commodity, Price volatility, Macroeconomic aggregates, ARDL, IRFs, Macroeconomic variables.

Abstract Information

Identifiers and Pagination:

Year: 2019
Volume: 13
First Page: 3
Last Page: 15
Publisher Item Identifier: BMS-TOASJ-2019-30

Article History:

Received Date: 24/05/2019
Revision Received Date: 23/07/2019
Acceptance Date: 09/08/2019
Electronic publication date: 21/11/2019
Collection year: 2019

© 2019 Ogundipe et al.

open-access license: This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International Public License (CC-BY 4.0), a copy of which is available at: ( This license permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Correspondence: Address correspondence to this author at Department of Economics and Development Studies, Covenant University, Ota, Nigeria;