Impact of Non-Oil Export on Economic Growth in Nigeria

Abstract

Prompted by the worrisome negligence of the non-oil sector by the Nigerian government, despite the sector’s huge potentials, this study attempted to examine the impact of Nigeria’s non-oil exports on real GDP from 1981-2021 using the Auto Regressive Distributed Lag (ARDL) bound test and the CUSUM stability test techniques. The results of the study reveal that there exists a short-run and long-run relationship between the dependent and independent variables in both models. The Engel-Granger (ECM) analysis result revealed that non-oil export has positive impact on economic growth in Nigeria, while the ARDL bound test result revealed that non-oil export terms of trade has negative impact on economic growth in Nigeria. The CUSUM stability test shows that non-oil export has positive and stable impact on economic growth, while non-oil exports terms of trade has negative and unstable impact on economic growth in Nigeria. From the results of the study, it was concluded that on the average, non-oil export is a veritable economic tool that could be used in improving Nigeria’s economy if the inherent potentials are optimally harnessed. The study recommends building of strategic bilateral trade agreements with other countries, especially countries that are net importers of Nigeria’s non-oil exports goods.