Economic Consequences Of Armed Conflict On Food Price Inflation In Nigeria
Idujagi Adaji, Benjamin Andesaati Bala
Keywords: Armed conflict, food price, inflation, ARDL, Granger causality, Nigeria
Abstract
This study investigates the impact of armed conflict on food price inflation in Nigeria. The study employs the Autoregressive Distributed Lag (ARDL) Bound Cointegration Test approach, utilizing time series data spanning from 1989 to 2023. The empirical findings indicate that armed conflict exerts a positive and statistically significant impact on food price inflation in both the short run and long run. Conversely, monetary credit to the private sector and lending rates demonstrates a significant mitigating effect on inflation in both the short run and long run. Notably, money supply exerts a positive and statistically significant effect on food prices, but only in the short run. Furthermore, the Granger causality test reveals the presence of a unidirectional causality running from inflation to armed conflict, suggesting that rising inflation may contribute to escalating armed conflict in Nigeria. The error correction
term (ECM) further confirms the existence of a long-run equilibrium,
with adjustments occurring at a rate of 60% per annum. These findings
underscore the critical need for comprehensive policy interventions
aimed at mitigating the adverse economic consequences of armed conflict while addressing key macroeconomic factors driving food price inflation in Nigeria. Implementing targeted strategies to enhance
financial sector stability, regulate money supply dynamics, and foster socio-economic stability is imperative for achieving sustainable economic growth and price stability in the country.
Author Biography
Idujagi Adaji, Benjamin Andesaati Bala
Department of Economics, Federal University, Wukari, Taraba State, Nigeria
Corresponding Email: [email protected]