Employment Effects of Import Competition on Agro-Based Manufacturing Firms in Nigeria

The rise in agricultural imports in Nigeria has raised concerns about its impact on employment in the agrobased manufacturing sector. This study examines how import competition affects employment in local agro-based manufacturing firms, focusing on labour trends, the impact of trade liberalisation, and the influence of terms of trade. The analysis is based on time series data spanning from 1986 to 2021, utilising both descriptive and inferential statistics. The findings reveal significant fluctuations in labour trends within Nigeria’s agro-based manufacturing sector. Between 1986 and 1991, the sector employed more labour than other sectors. However, from 1991 to 2002, other sectors outpaced agro-based manufacturing in employment. From 2002 to 2021, the agrobased manufacturing sector saw a resurgence in employment, surpassing other sectors. The study identifies several factors influencing employment, including import competition, unit capital cost, labour cost, trade openness, and exchange rates, all of which negatively affect employment in the sector. In contrast, terms of trade, changes in trade, export competition, capital stock, inflation, and GDP all exert a positive and significant effect on employment. The study recommends the implementation of policies to safeguard the domestic agro-based manufacturing sector while simultaneously promoting exports in these industries.