Reassessing non-oil trade and economic growth in Nigeria: evidence from the ARDL model

Abstract

The Nigerian economy has for decades, relied heavily on crude oil, resulting in a mono-product structure, which has consequently led to an unstable growth trajectory driven by fluctuation in oil prices. This study uses annual data from 1986 to 2021 to assess the impact of non-oil trade on Nigerian economic growth. This study checks how trade outside oil shapes Nigeria economy. The Autoregressive Distributed Lag (ARDL) model was employed to analyze both the short-run and long-run of non-oil exports, non-oil imports, and the rate of exchange on real GDP. The findings reveal that non-oil exports, non-oil imports, and exchange rate exert significant (p < 0.05) effect economic growth in the short run, while their long-run impacts are not statistically significant. The error correction term confirms a steady long-term relationship with a moderate rate of adjustment. To promote long-term economic growth in Nigeria, this study suggests boosting non-oil sectors, increasing export competitiveness, and maintaining a stable currency rate regime.

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