The stock market plays an important role in Nigerian economy in the sense that it mobilizes domestic resources and facilitates savings and investment. It impacts positively on the economy by providing financial resources through its intermediation process for financing long term projects. The main objective of the study is to analyze the effect of stock market on the growth of Nigerian economy. The data used is a secondary data collected from central bank of Nigeria statistical bulletin The analysis scope covered a period of thirty-four years spanning from 1980-2014. The econometric method adopted is the Ordinary Least square method (OLS), Augumented Dickey Fuller, Unit root test, Cointegration and Error correction model. The variables of the model include Gross domestic product (GDP) as the dependent variable and market capitalization, total new issues and value of listed shares are independent variables. The result show that total new issues and value of listed shares are statistically significant while market capitalization statistically insignificance. This research recommend that there is need to introduce and implement policies that will increase the level and size of Market Capitalization in the Nigerian Stock Market by the government through the Central Bank as increase in Market Capitalization will surely increase fund availability for desired investment which in turn will increase productivity of the Nation. The positive impact of total New Issues is an indication that organizations operating in the country should open access to public for investment and by so doing make returns available to the investors thereby increasing an average investors’ income.
1.1 Background of the Study
Climate change has been identified as one of the most threaten environmental hazard of the 21st century, climate change effect is vast and agricultural productivity (especially food production) happens to be one of its worst hits. The effect of climate change ranges from sea-level rise with its attendant consequences, and includes fiercer weather, increased frequency and intensity of storms, floods, hurricanes, droughts, increased frequency of fires, poverty, malnutrition and series of health and socio-economic consequences (von Braun et al, 2008).Climate change is described as a statistically variation that persist for an extended period, typically for decades or longer(Akinbobola, Adedokun and Nwosa, 2015). It includes shift in the frequency and magnitude of sporadic weather events as well as the slow continuous rise in global average surface temperature (IPCC, 2001).
Agriculture is a major activity that is essential for human survival as it produces basic commodities for society,provides food for people and gainful employment for the majority of Nigerians (Alawa, Asogwa and ikelusi, 2014). The inter-annual variability of rainfall, particularly in Northern Nigeria is large and often culminates in climate hazards especially hoods and droughts with their devastating effects on food production and associated catastrophic consequences (Jude et. al., 2015). By virtue of Nigeria’s location primarily within the lowland humid tropics, the country is generally characterized by a high temperature regime almost through the year. The mean maximum temperature in the far South is between 30°C-32°C while in the North it is between 36°C-38°C.
The vulnerability of Nigerian agricultural sector to climate change is of particular interest to policy makers because agriculture is a key sector in the economy accounting for between 60-70% of the labour force and contributing between 30-40% of the nation’s GDP (Ajetomobi Abiodun and Hassan, 2011). The sector is also the source of raw materials used in several processing industries as well as a source of foreign exchange earnings for the country. How much one can hold climate responsible for changes in agricultural productivity in Nigeria will, for a long time, remain a subject of research as long as other factors are at interplay in determining agricultural productivity.
The production of major export crops in the country such as groundnut, rubber, coffee, cocoa and palm produce in the country have declined in magnitude since the drought of 1972/73 which is the first real evidence of climate change in Nigeria (Ajetomobi et al., 2011). Though there is evidence of increase in food crop production generally in Nigeria, the nation is not self-sufficient in production of any food crop except cassava. The question remains therefore as to whether the production level will ever meet the demand level given the rate of population growth in the country. Also, the proportion of change in production due to impact of climate change will remain an important research focus as well as measures needed to improve the resilience of the farmers to enable them adapt to climate change (Adejuwon, 2006).
According to Jude et al. (2015) what is more worrisome is the fact that the climate change impacts in Nigeria are more predominantly man- made related than natural. Observation has shown that their causes ranged from poor drainage system, waste disposal to urban planning distortions among others.It is therefore not surprising that there is a growing consensus in the scientific literature that over the coming decade’s higher temperatures and changing precipitation levels caused by climate change will be unfavourable for crop growth and yield in Nigeria.
This study intends to enquire into the effect of climate change on agricultural productivity in Nigeria.
1.2 Statement of Research Problem
The issue of climate has become a recurrent subject of global debate in recent times. The intensity of the debate is on the increase due to the enormity of the challenge posed by the phenomenon especially in the third world. Though the threat of climate is universal, agricultural production activities are generally more vulnerable than other sectors. The vulnerability of the Nigerian agricultural sector to climate change is of particular interest to policy makers, because agriculture is a key sector in the economy accounting for between 60-70% of the labour force and contributing about 40% to the GDP (Jude et. al., 2015).
Over 80% of Nigeria’s population depends on rain-fed agriculture and fishing as their primary occupation leading to a high risk of food production system being adversely affected by the variability in timing and amount of rainfall, frequent outbreaks of crop pests and diseases and heat stress. Food shortages will increase and many farmers could lose their sources of livelihood due to climate change. Regrettably, food production in Nigeria has not kept the pace with the growing population in decades and it is susceptible to further decrease. This decline in production is attributed to some intertwining factors including climate change (Chikezie et. al., 2015). In addition studies such as Mohammed (2009) asserts that desertification has been on the increase in Nigeria and this poses a threat to food production in Nigeria
However, statistics shows thatthe growth rate agricultural output was fixed at 7.07% in 2005 and further grew by 5.83% in in 2010 and by 2013 the growth rate was slowed down to 2.93 and slightly picked up at 3.72% in 2015, evidently the growth of agricultural productivity hasconsistently remained below 10% since 2005 (CBN, 2015). During the same period, rainfall and temperature increased by -1.88 and 0.73% in 2005 and by 2010 rainfall further dropped by 7.40% and temperature also dropped by 0.36%. Subsequently, in 2013 rainfall further dropped by 24.78% while temperature grew by 0.74% and by 2015 rainfall yet again dropped by 11.35% and temperature also dropped by 0.36%.It can be seen that while agricultural output tends to be on a positive trend, rainfall on the other hand has been consistently on a decrease while temperature fluctuates over time. This situation is disagreement from the findings and conclusions of several studies such as Mohammed (2009); Jude et al (2015);Chikezie et. al., (2015); and Mbanasor et al (2015).
Thus this study intends to investigate the effect of climate change with particular interest on of the effect of rainfall and temperature changes on agricultural productivity in Nigeria.
1.3 Research Question
From the above problem statement, the following research question is raised
- What is the effect of climate change on agricultural productivity in Nigeria?
1.4 Research Objectives
The broad objective of this study is to investigate the effect of climate change on agricultural productivity in Nigeria. The specific objectives are thus to;
- Examine the effect of rainfall variation on agricultural productivity in Nigeria.
1.5 Research Hypotheses
The study hypotheses, as stated in their null form, are;
- H0: Climate change does not have any effect on agricultural productivity in Nigeria.
1.6 Significance of the Study
This study will be of significance to the government institutions in charge of environment and climate regulations as a tool for effective policy making. Also it will serve an additional to knowledge, a reference point and bed rock for further studies by students and researchers alike.
1.7 Scope of the Study
The study is conducted to examine the effect of climate change on agricultural productivity in Nigeria for the period of 36 years (1981 to 2015).Data is to be collected from the Central Bank of Nigeria, Nigerian Meteorological Agency, World Bank Data Base and National Bureau of Statistics Data Base.