CLIMATE CHANGE ADAPTATION AND AGRICULTURAL TRADE FLOWS IN AFRICA: EMPIRICAL EVIDENCE FROM NIGERIA
Yusuf, Isah Maikudi and Ibrahim Kekere Sule
Volume 7 Issue 1
Abstract
This paper examines how intra-African agricultural trade flows can serve as an adaptation mechanism to the impact of climate change in Africa. Specifically, it estimates the impact of climate and environmental variables on trade flows between Nigeria and 14 selected countries in Africa using the reduced form of gravity model. Estimation is done with the Fixed Effect and Hausman-Taylor regression techniques using panel data for the period 2006 to 2018. The result from both fixed effect and Hausman-Taylor model shows that the GDPT parameter estimates are positive and significant in both regressions indicating that the higher the GDP of both the exporting and importing countries, the higher the value of trade which is in line with the standard gravity model of international trade. Again, the result from the fixed effect and Hausman-Taylor model shows that rainfall and temperature play a significant role in promoting trade. Also, the similarity or differences in the distribution of these climatic variables significantly affect trade in both models. These results underscore the significance of taking into account climate change adaptation friendly policies in the AfCFTA treaty.
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