Export and Economic Growth Nexus in Nigeria

Abstract

This study examines the export and economic growth nexus in Nigeria. The study sets out to examine if there exist a causal and long-run relationship between export and economic growth in Nigeria. The underpinning theoretical framework dwell in classical economic growth thought, neo-classical economic growth thought, and endogenous economic growth thought. The study employed the annual time series data from 1970 to 2010 for the following variables: Real gross domestic product (y), export values (expo), exchange rate (exr), imports value (imp), gross capital formation (cap), and labour force population (lbr); using econometric procedures in testing for causality with the use of granger causality test and autoregressive distributed lag (ARDL) to ascertain if there exists a long-run relationship. The results obtained indicated that there exist a uni directional relationship between export and economic growth; while the results of the ARDL showed a co-integration (long-run relationship) between export and economic growth in Nigeria. The policy implication as evidenced from the results of the study is that the government should endeavour to invest more into the export sector, promote diversification of the economy from its over dependence on crude oil, facilitate proper machineries and provide infrastructures to support and motivate export activities, which will ultimately by multiplier effect, lead to economic growth. Export policies should be directed to the sector in which the impact of an increase in economic growth will be both desirable and large.

Key words: Nigeria; Export; Economic growth; Causality; Co-integration; Infrastructure; Economy diversification