The effect of oil and non-oil exports on economic growth in Nigeria

Abstract

This study examined the effect of oil and non-oil exports on economic growth in Nigeria. Time series data were used for the study for the period of 1980 to 2019. The result of unit root test shows that data were stationed at level and first difference. The study therefore employed Ordinary Least Square (OLS), Autoregressive Distributed Lag (ARDL) to produce short-run and long-run coefficients and Granger Causality Test to achieve the objectives of the study. The result of Error Correction Mechanism (ECM) shows the speed of adjustment (short-run dynamics) indicated by the coefficient of the error correction terms. The coefficient of CointEq(-1) of the model  was -0.197580. This shows that the speed of adjustment is approximately 82 percent. The result of the bounds test indicates the existence of a long-run relationship among the variables under study. The finding revealed that oil export and non-oil export has significant impact on economic growth in Nigeria. The study further revealed that there is causal relationship between oil exports and non-oil proceeds on Real Gross Product in Nigeria for the period under study. Based on the findings, the study concludes that both oil export and non-oil exports has significant impact on economic growth in Nigeria. Thus, recommends the need for government to promote the production and export of non-oil products because the overdependence on oil exports is negatively affecting economic growth. Government can supply funding and infrastructure that would accommodate and support the production of non-oil goods and services for domestic use and exports.