Export Instability and Economic Growth in Nigeria: A Time Series Analysis
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Date
2017-04-23
Authors
Oladipo, Olajide S.
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
Primary products and commodities are sources of raw material, and provide food and
livelihood for many families and communities. They also provide export earnings and
income for many governments in developing countries. In Nigeria, and other sub-Saharan
Africa countries, primary products and commodities are at the heart of local economies
and sometimes national economies. However, over the years, prices of primary products
and commodities have been very volatile, with serious implications for economic growth.
As a response, this study investigates the impact of export instability on economic
growth in Nigeria using time series data from 1970q1 to 2011q4 and an econometric
approach that addresses the problem of non-stationarity. As a departure from previous
studies, the paper uses an instability measure that varies over time and a relatively
large data sample size. Our results show that export instability has negative effects on
economic growth and investment.
The policy recommendation is that to smoothen Nigeria’s financial standing in the
short run, the government should ensure the national sovereign wealth fund (NSWF) is
properly managed given the unpredictability of the global export market. A long term
strategy is the continuation and intensification of government efforts to diversify the
export base of the country. The export sub-sector should be diversified by increasing
the share of non-traditional exports.