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TOPIC : THE ROLE OF NON-OIL EXPORT IN THE ECONOMIC GROWTH OF NIGERIA (1986
OF THE STUDY
The importance of export to a nation’s economic
growth and development cannot be over-emphasized. Export
is a catalyst necessary for the overall development
of an economy (Abou-Stait, 2005). The primary objective
of export policies in any economy is to increase the
level of economic activities. It follows, therefore
that export policies should be directed to the sector
in which the impact of an increase in export demand
will be both desirable and large. It is a source of
foreign exchange earning since trade transaction among
nations are settled in foreign exchange.
Furthermore, a well developed export sector will provide
employment opportunity for the people with the attendant
reduction in social costs of unemployment (Abogan et
al, 2014). Earnings from export will reduce the strains
on the balance of payment position and even improve
it. A rewarding export drive can turn a hitherto underdeveloped
economy into a prosperous economy. Export help in increasing
the level of aggregate economic activities through its
multipliers effects on the level of national income
(Usman and Salami, 2008). Income earned through exporting
will help in increasing the level of demand within the
The Nigerian economy has been and is currently being
characterized by a reasonable degree of openness, hence
its performance can be enhance through the development
of the external sector. But Alimi and Muse (2013) argue
that due to its present trends of the structure of Nigerian
economy, the country may not be able to take advantage
of increased openness to achieve trade induced growth.
The Nigerian external sector has always been dominated
by primary commodities (Adedokun, 2012), which have
the well known basic characteristic of low price and
income elasticity of demand, low growth of demand, terms
of trade and instability of export earning (Iyoha and
Oriakhi, 2002). This mono-culture situation brought
untold hardship on the people of the country. For instance,
from 1970 to date, oil exporting has constituted on
the average of 90% of the total foreign exchange earnings
(CBN, 2013). The adversity of the fluctuation in oil
price has in no small measure stalled the developmental
efforts of the various governments. For instance, fiscal
operations of the government was disrupted in 2009 as
the federally-collected revenue declined by 38.4% (CBN,
2009) in the year due largely to lower oil prices in
the international market caused by the global economic
meltdown This has made the Nigerian economy to swing
from the “oil boom era”, as exemplified
by the buoyant economy of the period with massive infrastructural
development and the Udoji award followed by the “oil
doom” period which arose from oil glut in the
world oil market since 1981 only led to the neglect
of the non-oil export productive base. This has led
to panic measures by successive governments from the
economic stabilization Act of 1982, Counter trade policy
of Buhari/Idiagbon regime and the introduction of Structural
Adjustment Programmes (SAP) by the Babangida Administration.
Furthermore, in the wake of the recent global economic
crisis, the government had to adopt policy measures
to address the problems and prevent the crisis from
throwing the economy into recession. The policy measures
adopted were mainly on three broad fronts, namely monetary
easing, fiscal easing, and trade policy.
unimpressive performance of the non-oil sector and the
vulnerability of the external sector thus dictate the
urgent need for a reappraisal of the thrust and contents
of the development policies and commitments to their
implementation. Indeed, the need for a change in the
policy focus and a shift in the industrialization strategy
is imperative, if Nigerian economy is to be returned
to the path of sustainable growth and external viability.
OF THE PROBLEM
Although various factors have been adduced to Nigeria’s
poor economic performance, the major problem has been
the economy’s continued excessive reliance on
the fortunes of the oil market and the failed attempts
to achieve any meaningful economic diversification (Osuntogun
et al., 1997), reflecting the effect of the so called
“Dutch disease”. Rezaie (2013) opines that
the development of non-oil exports is considered as
a necessity, because it increases foreign exchange earnings
and as a result, makes economic development programs
that involve exchange costs, possible. Nwidobie (2014)
posits that non-oil exports contribute to export diversification
and serve as a channel for poverty reduction.
A report released by PricewaterhouseCoopers (PwC) in
February 2013, revealed that oil prices are likely to
decline by 25-40% over the next four years as a result
of increased shale oil and gas production in the US.
Besides, the renewed emphasis on the production of alternatives
to fossil-fuel energy, such as solar, wind and bioenergy
in the advanced economies, would reduce oil demand and
oil revenue. The ripple effect will trickle down from
a decline in oil revenue to a decline in government
revenue, depletion of external reserves, pressure on
the naira and overall macro economy.
The need to protect the economy from this imminent threat,
correct the existing structural distortions and put
the economy on the path of sustainable growth is therefore
compelling. This raises the question of what else need
to be done in order to diversify the economy and develop
the non-oil sector in order to realize the potentials
of the sector. This calls for new thoughts and initiatives,
which is the essence of this project.
OF THE STUDY
The objectives of the study are as follows:
(i) To examine the trend and composition of the non-oil
export in Nigeria;
(ii) To investigate the extent of the contribution of
non-oil export sector to the Nigerian economy;
(iii) To identify the factors that are responsible for
the unimpressive performance of the non-oil sector of
The research questions to be examined in this study
are as follows:
1. What is the trend and structure of the Nigeria’s
non-oil export since 1986?
2. What impact does non-oil exports have on the economic
growth of Nigeria?
3. What factors are responsible for the unimpressive
performance of the non-oil sector of Nigeria and how
can they be resolved?
The research work will make use of the econometric approach
in estimating the relationship between non-oil export
and the Nigerian economic growth. The dependent variable
is real Gross Domestic Product while the independent
variable is the non-oil export. The Ordinary Least Square
(OLS) technique will be employed in obtaining the numerical
estimates of the coefficients in different equations
using Statistical Package for Social Sciences (SPSS).
The OLS method is chosen because it possesses some optimal
properties; its computational procedure is fairly simple
and it is also an essential component of most other
estimation techniques. Here, Gross Domestic Product
(GDP) shall be used as the proxies for the level of
economic activities. The estimation period will cover
1986 to 2013.
The data for this study would be obtained mainly from
secondary sources, particularly from Central Bank of
Nigeria (CBN) publications such as the CBN Statistical
Bulletin, CBN Economic and Financial Review Bullion,
CBN monthly reports, CBN Annual Reports and Statements
of Accounts of various years.
OF THE STUDY
The significance of this study are as follows:
1. It would provide an econometric assessment of the
performance of the Nigerian non-oil export in relation
to the gross domestic product;
2. The study would also identify the factors that are
responsible for the poor performance of the non-oil
export in Nigeria.
OF THE STUDY
This project work focuses on the role of the export
sector in the economic growth and development of Nigeria,
specifically on the role of the non-oil export. The
causes and consequences of the neglect of the non-oil
export shall be discussed in detail as well as the trend
examined since 1986 in order to note its growth. Besides,
the contribution of the non-oil export to the economic
growth of Nigeria shall be investigated empirically
with data spanning from 1986 to 2013.
OF THE STUDY
This project shall be divided into five chapters. The
first chapter provides the background of the subject
matter justifying the need for the study. Chapter two
shall present related literature concerning the role
of non-oil export in economic growth. The structure
of non-oil export of Nigeria during the pre and post
SAP era shall also be discussed. The research methodology
shall then be stated in chapter three while data presentation
and analysis shall be made in chapter four. Concluding
comments in chapter five shall reflect on the summary,
conclusion and recommendations based on the findings
of the study.
Abogan, O. P.; Akinola, E. B. and Baruwa, O. I. (2014)
“Non-oil export and Economic growth in Nigeria
(1980-2011)”. Journal of Research in Economics
and International Finance (JREIF). Vol. 3, no.
1, pp. 1-11.
Abou-Stait, F. (2005) “Are Exports the Engine
of Economic Growth? An Application of Cointegration
and Causality Analysis for Egypt, 1977-2003”.
African Development Bank, Economic Research Working
Paper. No 76, July.
Adedokun, A. J. (2012) “Oil Export and Economic
Growth: Descriptive Analysis and Empirical Evidence
from Nigeria”. Pakistan Journal of Social
Sciences. Vol. 9, no. 1, pp. 46-58.
Alimi, S. R. and Muse, B. O. (2013) “Export -
Led Growth or Growth – Driven Exports? Evidence
from Nigeria”. British Journal of Economics,
Management and Trade. Vol. 3, no. 2, pp. 89-100.
Central Bank of Nigeria (2009) Annual Report for the
Year Ended 31st December. Abuja: Central Bank of Nigeria.
Central Bank of Nigeria (2013) Annual Report for the
Year Ended 31st December. Abuja: Central Bank of Nigeria.
Iyoha, M. A. and Oriakhi, D. (2002) Explaining African
Economic Growth Performance: The Case of Nigeria. A
Revised Interim Report on Nigerian Case Study prepared
for the African Economic Research Consortium Research,
Nwidobie, B. M. (2014) “Growth in Nigeria’s
Non-Oil Export Finance and Non-Oil Export Performance:
A Correlational Analysis”. International Journal
of Business and Social Research (IJBSR). Vol. 4,
no. 2, pp. 31-39.
Osuntogun, A., Edordu, C. C. and Oramah, B. O. (1997)
“Potentials for diversifying Nigeria’s non-oil
exports to non-traditional markets”. AERC
Research Paper. No. 68, November.
Rezaie, M. (2013) “Factors Affecting Non-Oil Exports”.
Kuwait Chapter of Arabian Journal of Business and
Management Review. Vol. 2, no. 5, pp. 17-23.
Usman, O. A. and Salami, A. O. (2008) “The Contribution
of Nigerian Export-Import (NEXIM) bank towards Export
(non-oil) Growth in Nigeria (1990-2005)”. International
Business Management. Vol. 2, no. 3, pp. 85-90.
- Ten Thousand Naira (Non-Negotiable)
Regression Data and Results are included
version of this project is available -
economic growth, economic growth in nigeria, nigerian
economic growth, exporting to nigeria, economic growth
statistics, economic growth data, sources of economic
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