Assessing the Impact of The Non- Oil Export Sector on the Economic Growth of Nigeria

Before the oil boom of the 1970’s, Nigeria’s export trade was largely dominated by non-oil products such as groundnuts, palm kernel, palm oil, cocoa, rubber, cotton, coffee, amongst others. Since the 1980s, the monolithic nature of Nigeria’s economy has been continuously threatened by the volatility in crude oil prices on the international market and there has been urgent need for the government to diversify the economy away from oil to non-oil sectors This thesis conducted an investigation on the impact non-oil exports has on the economic growth of Nigeria. The econometric techniques employed to achieve the research objective includes the Ordinary Least Square technique, Johansen cointegration approach, and Granger causality test was adopted by testing the annual data of GDP, Non-oil exports, Foreign direct investment, Government expenditure, Exchange rate, inflation rate and Trade openness all from 1981 to 2019. The model was observed to be statistically significant, with some of the variables exhibiting the expected results. The study showed that a statistically significant long run and positive relationship between non-oil exports and economic growth in Nigeria exists. The results indicated that a 1 percent increase in non-oil exports increases GDP growth by 0.21 percent at 1 percent significant level. The Granger Causality test also confirms a short-run causal relationship indicating that non-oil export causes an increase in the economic growth of Nigeria. The implication of the results is that non-oil export is effective in diversifying the productive base of Nigerian economy and that export-led-growth hypothesis is valid in Nigeria context. The study also recommended diversification as a tool for government and policy maker to broadened the revenue base of the country using non-oil sectors to safeguard the nation from further devastating effects of oil shock and enhance a path to everlasting prosperity