Exchange Rate and Non-Oil Exports in Nigeria (1986-2021)

Abstract

This study ascertained the effect of exchange rate on non-oil exports in Nigeria covering the period 1986-2021. Data for the study were extracted from the Central Bank of Nigeria (CBN) statistical bulletin. The method of data analysis used is the linear regression method with the application of the Error Correction Model (ECM). The major findings of the study reveal that there exists a negative relationship between exchange rate volatility and non-oil exports in Nigeria, there exists a negative relationship between exchange rate and non-oil exports in Nigeria and there is a unidirectional causality relationship between exchange rate volatility and non-oil exports in Nigeria. Hence, exchange rate volatility causes non-oil exports in Nigeria. it is therefore the recommendation of the study that the government of Nigeria should aggressively pursue revenue diversion policies. This will go a long way in driving non-oil exports and also strengthen our currency and monetary authorities should ensure exchange rate stability in order to stem inflationary tendencies in Nigeria which have adverse effects on the growth of non-oil exports.