Macroeconomic Policy Management for Sustainable Food Security Outcome in Nigeria

Abstract:

The study analyzed the effect of monetary and fiscal policies on food production index an indicator of food security from 1985 to 2016. The results of the study showed that government expenditure on agriculture and exchange rate were stationary at level while food production index, inflation rate and interest rate were stationary at first difference; there was a single cointegrating equation showing that there was a long run relationship among variables. The result of the vector error correction model (VECM) revealed that in the short run, only government expenditure positively affected food production index significantly. In the long run government expenditure on agriculture, inflation rate and interest rate at negatively affected food production index and exchange rate positively affected food production index. It was therefore recommended that government budget allocation to agriculture should meet up with the Maputo agreement to ensure the necessary increase of food production.