COMPARATIVE ANALYSIS OF OIL AND NON-OIL EXPORTS AND THEIR RELATIVE EFFECT ON THE GROWTH RATE OF NIGERIA'S ECONOMY

Abstract

This study comparatively examine the relative impact of oil and non-oil exports on the growth rate of the Nigeria's economy. Ex-post factor research design was adopted in the investigation. Multiple regression analysis was employed, in which Vector Error Correction mechanism (VECM) was applied. The results revealed the presence of long-run relationship among the variables. The results as well, indicated that about 19.48% of the discrepancy between the short run and the long-run values are corrected annually. It further revealed that non-oil exports positively impact more on the Nigeria's economy as it approximately contributed to 41.5% to GDP; while oil exports only contributed 2.1% to the GDP within the period of this study. Based on the findings, the study recommended for government to intensify efforts at non-oil export promotion and diversification policies, and also to intervene in the foreign exchange market in order to reduce or stabilize the exchange rate of the naira against the currencies of our trading partner.