EFFECT OF EXCHANGE RATE POLICIES ON NON-OIL EXPORT IN NIGERIA

Abstract

This study investigated the impact of exchange rate policies on non-oil export in Nigeria, using data for the period of 1981-2019, Ordinary Least Squared (OLS) method of data analysis was adopted because of its Best Linear Unbiased Estimators (BLUE) properties. The data for the variables used was sourced from Central Bank of Nigeria Statistical Bulletin. The variables used were Exchange rate, Trade openness, Money supply, were independent variables and non-oil export as dependent variable. The study adopted the unit root test, co-integration approach, as well as Error Correction Mechanism. The study found that trade openness has negative and significant impact on non-oil export in Nigeria, Exchange rate sector has negative and significant effect on non-oil export in Nigeria, Money supply has positive and significant impact on non oil export in Nigeria. The study recommends that trade liberalization policy of the country should be carefully pursued in a way that the country’s level of trade openness should favour non-oil export trade performance, while diversification of the country’s economy from that of oil dependence is necessary to checkmate the adverse effect of the county’s trade balance on non-oil export performance.