Does Rice Importation Affect Production? Evidence from Nigeria

Rice is an important staple food in Nigeria, playing a critical role in the country’s food security, agricultural development, and economic growth. This research investigated how rice importation affected rice production and Nigeria's economic growth from 1990 to 2020 using time series data. The study aimed to understand the dynamics between rice importation, local production, and economic performance to inform policy decisions that promote agricultural sustainability. The data were analyzed with various econometrics models such as the trend model, Augmented Dickey-Fuller (ADF) test, Johansen Cointegration technique, Granger causality test, and simultaneous equation model. The results showed a significant gap between rice demand and supply in Nigeria and a long-run relationship between rice production, rice importation, and economic growth. While the gap indicated a high dependence on foreign rice to meet the rising domestic demand, the long-run relationship indicated that rice importation had a negative impact on the economy. The results also revealed causal relationships between rice production, rice importation, and GDP, and that rice importation had a negative and significant effect on Nigeria's economic growth and domestic rice production potential. Rice production in Nigeria was influenced by rice importation and population growth, while rice importation was affected by exchange rates and population growth. The study concluded that a sustained overdependence on rice importation has adverse consequences on Nigeria's economy and thereby suggested that the adoption of a multifaceted policy measure or strategy that emphasizes reducing rice importation, increasing domestic production of rice, and enhancing the standard of living for domestic rice producers is a key policy objective.