Dynamics and competitiveness of Nigeria’s sesame production in international trade: Vector error correction method

Year 2024, Volume: 37 Issue: 2, 73 - 80, 02.08.2024

Mohammed Bello Usman , Ibrahim Maharazu , Olugbenga Omotayo Alabı , Olugbenga Oladele , Jeremiah Aluwong

https://doi.org/10.29136/mediterranean.1480015

Abstract

This research study evaluated the dynamics and competitiveness of Nigeria’s sesame (Sesamum indicum) production in international trade. Secondary data were used, in the data period of 1982 to 2022 (41 years). The data used were sourced from NBS, CBN, FAO, World Bank publication, and General Household Survey-Panel (GHS-P) in conjunction with Federal Ministry of Agriculture and Rural Development. The econometric tools used were Augmented Dickey-Fuller (ADF) unit root test, Johansen co-integration test, Zivot – Andrews (Z-A), Lee Strazicich (LM) structural break unit root tests, and vector error correction model (VECM). The result of the ADF unit root test shows that all the test variables were stationary at first difference I (1). The results of the Johansen co-integration test for the time series data shows that the trace test statistics indicate 2 co-integrating equations, the Max-Eigen values also indicates 2 co-integrating equations. The estimated long run effect using VECM shows that area, yield, and world trade in oilseed, were positively and significantly related to the dynamics and competitiveness of Nigeria’s sesame seed in international trade. The real exchange rate had a negative coefficient and was non-significantly related to the dynamics and competitiveness of Nigeria’s sesame seed in international trade. The coefficient of the error correction term (ECM) is with the expected negative sign and statistically significant at 1% level of probability, this is an indication of a move back towards equilibrium with a magnitude of -0.95. Policies that would encourage exportation of sesame should be pursued and enhancing research activities on improving quality of sesame produced.

Keywords

Dynamics, Export potentials, Competitiveness, Sesame production, Vector Error Correction model

Ethical Statement

NIL

Supporting Institution

NIL

Project Number

NIL

Thanks

NIL

References

• Abbott PH, Bredahl M (1992) Competitiveness: Definitions, Useful Concepts and Issues. Infoagro.net, Accessed 2 January, 1992.
• Alabi OO, Madaki MJ, Sanusi SO, Umar SA, Omole EB, Olumuyiwa SA, David HS, Emeghara UU, Waziri-Ugwu PR, Shaba MG (2022) Factors Influencing Export Performance of Ginger (Zinbiger officinale) in Nigeria. International Journal of Agriculture, Environment and Food Sciences 6(3): 370-377.
• Aro-Gordon S (2017) Econometric Analysis of Exchange Rate and Export Performance in a Developing Economy. Asian Economic and Financial Review 7(4): 334-348.
• Bedigian D (2015) Systematics and Evolution in Sesamum L (Pedaliaceae) Part 1: Evidence Regarding the Origin of Sesame and its Closest Relatives. Webba, Journal of Plant Taxonomy and Geography 70: 1-42.
• Cision PR Newswire (2019) Global Sesame Seeds Market Worth $17.77 Billion by 2025: Hexa Research, available from: https://www.prnewswire.com/news-releases/global-sesame-seeds-market-worth-17-77-billion-by-2025-hexa-research-300791447. html. Accessed 12 March, 2020.
• Dickey DA, Wayne AF (1979) Distribution of the Estimators for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association 74(366): 427-431.
• Dickey DA, Fuller WA (1981) Likelihood Ratio Statistics for Autoregressive Time Series with Unit Root. Econometrica 49: 1057-1072. http://dx.doi.org/10.2307/1912517.
• Fagerberg J (1988) International Competitiveness. The Economic Journal 98: 355-374.
• FAO (2011) Food and Agriculture Organization, Database, Rome, Italy, Accessed 12 February, 2011.
• FAO (2019). Food and Agriculture Organization Database, Rome, Italy, Accessed 17 January, 2019.
• FAO (2024) Food and Agriculture Organization, Database, Rome, Italy, Accessed 23 February, 2024.
• FAOSTAT (2024) Food and Agriculture Organization Database, Italy, Accessed 16 January, 2024.
• Haque I (1995) Technology and Competitiveness, Chapter 2: Trade, Technology and International Competitiveness, the World Bank, USA.
• Kingu J (2014) Determinants of Tanzania Agricultural Export: Case of Cotton lint. Developing Country Studies 4(1): 91-104.
• Lee J, Strazicich MC (2004) Minimum LM Unit Root Test with Two Structural Break, Working Paper, Department of Economics, Appalachain State University.
• NBS (2016) Annual Abstract of Statistics, National Bureau of Statistics, Abuja.
• NPC (2024) National Population Commission of Nigeria. Updated National Census.
• Okuduwor AA, Amadi Robert CC, Udi OI (2022) Assessing Agricultural Export Evidence on Economic Growth in Nigeria: 1999 – 2020. International Journal of Business and Applied Economics 2(2): 79-96.
• Umar SA (2020) The Competitiveness of Nigeria’s Sesame and Soyabean Export in International Trade: 1986 – 1997. Unpublished PhD Thesis Department of Agricultural Economics, University of Abuja, Nigeria.
• Wacal C, Basalirwa D, Okello-Anyanga W, Murongo M F, Namirembe C, Malingumu R (2021) Analysis of Sesame Seed Production and Export Trends: Challenges and Strategies Towards Increasing Production in Uganda. Oilseeds & Fats and Lipids (OCL) 28, 4.
• Zebib H, Bultosa, G, Abera S (2015) Physico-Chemical Properties of Sesame (Sesamum indicum) Varieties Grown in Northern Area, Ethiopia. Agricultural Sciences 6: 238-246.
• Zivot E, Andrews DWK (1992) Further Evidence on the Great Crash, the Oil Price Shock and the Unit Root Hypothesis. Journal of Business and Economic Studies 10: 251-270.