ActaSATECH Journal of Life and Physical Sciences: ISSN: 15971007

An Analysis of the Spatial Integration of Groundnut Markets in Nigeria

Authors: Ayodeji Bello Taofik, Lawrence Balogun Olubunmi, John Afodu Osagie,

Pages: (1-9 )


The study examined the spatial integration of groundnut markets in Nigeria. It covered two producing states of Kano and Niger and four consumption states of Oyo, Lagos, Cross River and Abia States. The monthly retail prices between January, 2008 and December, 2013 obtained from markets in the state capitals were used. Econometric models employed were Unit root test, Cointegration and Ravallion multiple regression. Results indicated that Kano/Abia pair gave index of market concentration (IMC)1=0.2 and IMC2=0.2 indicating a high short-run market integration for the periods. The Kano/Cross River pair gave IMC1=0.4 and IMC2=3.6, indicating high and low short- run market integration in periods one and two respectively. Kano /Lagos pair gave IMC1=0.04 and IMC2=0.1 implying a high short-run market integration for the periods. The Kano /Oyo pair gave IMC1=0.1 and IMC2=0.4 implying high short- run market integration for the periods. Niger /Abia pair gave IMC1=0.3 and IMC2=0.3, hence producing the same result as the Kano/Oyo pair. Niger/Cross River pair gave IMC1=0.01 and IMC2=0.03, implying a high short run market integration for the periods, The remaining pairs of Niger/Lagos (IMC1=0.2 and IMC2=0.9) and Niger/Oyo (IMC1=0.1 and IMC2=0.2) exhibited high short run market integration. These results implied a high marketing efficiency in the groundnut markets. Kano/Oyo, Niger/Abia and Niger/Lagos pairs also have a high degree of marketing efficiency. Kano/Cross River pair lag period one showed a very high degree of market integration, hence high marketing efficiency. There study recommends a nation-wide policy to improve groundnut marketing efficiency, affordability and consumption of groundnut end-users.

Keywords: Spatial integration, groundnut markets, indices Introduction Nigeria is mainly an agrarian state. The emphasis on agriculture was so great that, there was tremendous output of groundnut in the North, cocoa in the West and palm oil in the East. The groundnut pyramids of the 1970’s in Kano testified to this fact. This achievement could not be sustained. This was due to the discovery of crude oil in the early1970’s. This subsequently became the major foreign earner for the country leading to the neglect of the agricultural sector. Groundnut output declined from 7680 thousand tones in 1965 to 7338 thousand tones in 1995 (Ngbede et al; 2009). Its contribution to GDP in 1996, 1997 and 1999 stood at 39%, 339.4% and 40.40%, of market concentration, marketing efficiency, Nigeria.,

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