EFFECT OF OIL PRICE FLUCTUATIONS ON THE PRICE OF SELECTED AGRICULTURAL COMMODITIES IN NIGERIA (JANUARY 2000 – DECEMBER 2015)

This study was conducted to examine the effect of oil price fluctuations on the price of selected agricultural commodities in Nigeria using time series data sourced from Central Bank website, United States Energy Information Administration (E.I.A) website and Food and Agricultural Organization Statistics (FAOSTAT) between January 2000 and December 2015. The variables employed include oil price, exchange rate, the price of agricultural commodities (rice, wheat, soybean, palm oil). The Non-Linear Autoregressive Distributed Lag Model (NARDL) was employed in the analysis of the data using Eviews 9.0.

 The result of the data analysis revealed that increase and decrease in oil price have a positive and significant relationship with the price of all the agricultural commodities in the short run, while in the long run, increase and decrease in oil price have a positive but insignificant relationship with the price of all the agricultural commodities. 

This study therefore conclude that oil price have a short run positive effect on the price of the selected agricultural commodities. Thus, it is recommended, based on the findings of this study that the government should formulate agricultural policies that will insulate the economy in the short run against any global food crisis that may result from oil price change. 

TABLE OF CONTENTSTITLEiCERTIFICATIONiiDEDICATIONiiiACKNOWLEDEMENTivTABLE OF CONTENTvLIST OF TABLESix LIST OF FIGURESxABSTRACTxiCHAPTER ONE: INTRODUCTION11.1 Background of the study11.2 Statement of the Problem31.3 Objective of the study71.4 Research Hypothesis71.5 Justification for the study81.6 Scope of the study81.7 Plan of the study8 CHAPTER TWO: LITERATURE REVIEW102.0 Introduction102.1 Theoretical Review102.1.1 Theory of Real Business Cycle112.1.2 Neutrality Hypothesis112.1.3 Conservation Hypothesis122.1.4 Growth Hypothesis12 2.1.5 Feedback Hypothesis112 2.2 Methodological Review132.3 Empirical Review 16CHAPTER THREE: THEORETICAL FRAMEWORK AND METHODOLOGY193.0 Introduction1193.1 Theoretical Framework 193.2 Methodology193.2.1 Study Area203.2.2 Data and Measurement of Variables233.3 Estimation Procedures243.3.1 Preliminary analysis243.3.1.1 Descriptive Statistics24 3.3.1.2 Graphical analysis253.3.1.3 Formal pre-test253.3.1.4 Unit root test263.3.1.5 Co-integration Test263.3.2 Estimation Technique263.3.3 Post Estimation273.3.3.1 Normality Test273.3.3.2 Heteroscedasticity Test273.3.3.3 Serial correlation Test283.3.3.4 Linearity Test28CHAPTER FOUR: PRESENTATION AND DISCUSSION OF RESULT294.0 Introduction294.1 Preliminary Analysis294.1.1 Descriptive statistics294.1.2 Graphical Analysis314.1.3 Unit root Test334.1.4 Co-integration Test354.2 Model Estimation Result384.2.1 Empirical Analysis38 4.2.2 Wald Test434.3 Post Estimation 504.3.1 Normality Test504.3.2 Test for Serial correlation504.3.3 Test for Heteroscedasticity504.3.4 Linearity Test50CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION525.1 Summary of Major Findings525.2 Conclusion of the Study535.3 Recommendation of the Study545.4 Suggestion for Further Studies55REFERENCES56APPENDIX60