Econometric Analysis of the Nexus of Exchange Rate Deregulation and Agricultural Share of Gross Domestic Product in Nigeria

This study examined the relationship between exchange rate deregulation and the agricultural share of gross domestic product in Nigeria from an econometric perspective using time series data. The data were analysed using augmented dickey fuller unit root test, unrestricted vector autoregression and pairwise granger causality. The results of the data analysis revealed the existence of unidirectional causality from exchange rate to agricultural share of gross domestic production in Nigeria and this implies that market driven exchange rate policy has been significant in influencing the trend in agricultural share of gross domestic production in Nigeria. However, it is recommended that the monetary authority of Nigeria should closely monitor the movement of the market driven exchange rate so that exchange rate deregulation does not become counterproductive through unhealthy price distortions on agricultural production, international trade and foreign direct investment in the agricultural sector of Nigeria’s economy.