Non-Oil Exports and Exchange Rate Movement in Nigeria

The study examined the effect of non-oil exports on exchange rate movement in Nigeria from 1986 to 2023. The study adopts the annual time series data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and World Development Indicators (WDI). The broad objective of the study is to investigate the effect non-oil exports have on the exchange rate in Nigeria. The ARDL bounds test for co-integration shows there exists a long-run relationship between the variables in the model. Employing the econometric approach, the Autoregressive Distributed Lag (ARDL) model, our result shows that in the long run, non-oil exports and gross domestic product are statistically significant to the exchange rate in Nigeria, while other variables; foreign direct investment and gross fixed capital formation are statistically insignificant to exchange rate in Nigeria. The result shows that non-oil exports have a positive coefficient and other variables carry negative coefficients. This means that a percentage increase in non-oil exports will increase the exchange rate in Nigeria by 46.75% in the long run. The study recommends that to improve Nigeria’s exchange rate, more attention should be given to the non-oil sector. Production of non-oil products should be done in large quantities not just for domestic consumption but also for export.