Resource Management and Food Insecurity in Nigeria

Abstract

The increasing spate of fluctuations in the world price of crude oil and the global food crisis in recent years have been issues of concern to policymakers the world over. Since the first oil shock in 1974, oil has annually produced over 90 per cent of Nigeria's export income. In 2000, Nigeria received 99.6 per cent of its export income from oil, making the world's most oil-dependent country. Despite the huge earnings from oil Nigeria remains one of the most food insecure countries in the world. In addition, one of the thorniest issues in Nigeria's policy arena today is how to provide food for her teeming population. Oil price shocks have also had profound effects on Nigeria's domestic sector. This paper thus analyses the dynamic relationship between oil prices and food insecurity in Nigeria using a VAR approach. The results of the estimation reveal that the over dependence on oil resulted in the neglect of the agricultural sector, hence decline in the production of food for the teeming population in Nigeria. The variance decomposition also shows high imports of food have contributed significantly to shocks in food supply, but not significant in determining food security There is therefore an urgent need for policies that will enhance domestic production of staple foods and reduce the over dependence on oil resource in Nigeria.

Key words: oil Resource, food insecurity, VAR, Nigeria