THE EFFECT OF EXPORT TRADE ON THE ECONOMIC GROWTH OF NIGERIA

Abstract

This study investigates the effect of export trade on the economic growth of Nigeria, analyzing secondary data from 1992 to 2022 sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. The Ex-post facto research was used, employing an Autoregressive Distributed Lag (ARDL) model to assess the relationships between oil exports, non-oil exports, export growth rates, and GDP. The findings indicate a positive and significant relationship between oil exports and GDP, demonstrating that increases in oil exports are strongly associated with GDP growth. Despite some of the worst declines in output and trade volume during the pandemic as a result of the lockdown, there was a surge in 2022 due to increased global demand and rising oil prices. Non-oil exports also have a significant positive impact on GDP, highlighting the crucial role of diversifying export sectors to enhance economic growth. Substantial increases in non-oil exports from 2018 to 2019, a slight decline in 2020, and continued growth in subsequent years indicate diversification and increased competitiveness in non-oil sectors. Additionally, the export growth rate positively affects GDP, with higher export growth rates contributing significantly to economic output. The study concluded that export trade contributes to the growth of the Nigerian economy, even though trade was affected significantly by the Covid-19 pandemic, there was a surge in 2022. The study recommends diversifying the export portfolio to reduce dependency on oil exports and mitigate risks associated with commodity price volatility. Also, sectors like agriculture, manufacturing, and services which have significant export potential but are currently underutilized should be promoted.