NON OIL EXPORTATION AND BALANCE OF PAYMENT ACCOUNT IN NIGERIA
Figures and abstract
The recent drop in the price of oil has reduced the funds available for distribution to Nigeria’s three tiers of government. The need for federal, state, and local governments to generate adequate revenue from non-oil exports has thus become an extreme matter of urgency and importance. As a result, this study looks into the impact of non-oil exports on the Nigerian economy.
The data used were secondary sources, and the analysis period was 1970-2014. The study used the OLS technique and annual time series data of variables to determine the impact of non-oil exports on economic growth. The data’s stationarity was checked, which means it was tested for unit root using the Augmented Dickey-Fuller (ADF) test. This is done to avoid erroneous regression (Gujarati 2007:820).
The findings show that non-oil exports have a significant impact on GDP, but the average impact is negative. This implies that a unit increase in non-oil exports boosts GDP significantly. Both openness and the exchange rate had a positive impact on GDP during the period under consideration;
however, the impact of openness was not significant. This highlights the importance of diversifying Nigeria’s economy away from its reliance on oil by promoting non-oil exports as a major source of foreign exchange earnings. Non-oil exports can play a more effective role by improving export assistance and incentive programs aimed at assisting exporters in increasing the volume and value of non-oil exports and encouraging meaningful economic diversification.
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NON OIL EXPORTATION AND BALANCE OF PAYMENT ACCOUNT IN NIGERIA
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