Impact Of Non-Oil Export On Economic Growth In Nigeria | Project Materials | mephistolessiveur.info
This study attempts to re-investigate the role of oil and non-oil exports in economic growth in Iran using the multivariate cointegration and Granger causality. Abstract: This study examines the contribution of non oil export to the growth of the not significant relationship with GDP which is in line with economic theory. among FDI, non-oil exports, and economic growth is investigated using the major impetus for this relationship is the export-led growth (ELG) hypothesis which.
Economic growth is the desire for higher levels or real per capital income, real output which must grow faster than the production of the economy in question.
Economists, policy-makers, public and private sectors work ceaselessly towards attaining economic growth by the use of development and growth models and policies. Among the policies used are trade policy Import and export policies, monetary policy, exchange rate policy, fiscal policy, market etc.
In this study, the non-oil exports and economic development in Nigeria will be examined. Non-oil exports are the products, which are produced within the country in the agricultural, mining and querying and industrial sectors that are sent outside the country in order to generate revenue for the growth of the economy excluding oil products. These non-oil export products are coal, cotton, timber, groundnut, cocoa, beans etc. Today, as in the past, the growth of Nigerian economy remains partly dependent upon increasing productivity of the agricultural sector.
Precisely, it is from agricultural exploits that the economy has received its principal stimulus to economic growth. Agricultural sector can assist through the exportation of principal primary commodities which will increase the nation's foreign earnings and which can be used to finance a variety of development projects.
The growth of the agriculture sector can make a substantial contribution to the total tax revenue, as well as having some implications for inter-sectional terms of trade.
EconPapers: Contribution of Non Oil Exports to Economic Growth in Nigeria ()
Also in the area of capital formation, the savings generated in this sector can be mobilized in development purposes, while increase in rural income as a result of increasing agricultural activities can further stimulate the product of the modem sector. The needs of the agricultural sector could indirectly influence the creating of additional infrastructures which are indispensable to rapid economic development. Another non-oil export to be dwelled on, is industrial sector.
It is the fastest growing sector in Nigeria economy.
It comprises of many manufacturing and mining. Nigeria has manufacturing base prior to and shortly after. The problem was due to lack of modern technology skills, managerial experience of complex organizations and financial back -up.
The problem was further aggravated by the colonialists' merchants convincing arguments on the goodness of comparative cost advantage.
Nigerians were coaxed into concentrating their efforts in the production of primary agricultural products and exporting them to the metrological industries in Europe. Our industrial sector took off after independent relied on satellite firms representing British interest.
The bank sector, which is constellation of colonial banks branches and some companies that were able to invest in manufacturing were the multi-national that have access to funds, technology and managerial expertise. This greatly hindered the progress of indigenous entrepreneurs.
The Nigerian manufacturing sector has been described by Ikediala as consisting of more assembling plants. The capacity utilization of manufacturing industry has always been low in this country. The reasons as put by CBN are not unconnected with raw materials scarcity, consumers resistance due to high prices, increase in cost of manpower.
Others mentioned are equipment breakdown due to poor technology, lack of spare parts. Conventional wisdom holds an interaction exists between financial sector and economic growth exists, as a vibrant financial sector will lead to a growth of the Nigerian economy.
It is against this back drop, that major economies of the world strive to develop their financial sector so as to achieve sustainable economic growth. A new insight to cover a more recent data set, as regards time series was adopted, in order to ascertain the nature of the causal relationship existing among the variables in Nigeria.
Review of Literature Earlier and contemporary studies on non-oil export, financial sector development and Economic growth have been reviewed for better understanding. Non-Oil Export and Economic Growth From the traditional Keynesian theory, an increase in exports is one of those factors that can cause an increase in demand and thus will certainly bring about increase in outputs, all other things being equal .
The export-led growth hypothesis postulates that exports are a main determinant of economic growth and the arguments here are as follows: Second, export expansion increases productivity by offering potential for scale economies  . Third, exports alleviate foreign exchange constraints and provide greater access to international markets .
They investigated such relationship in a time series framework using the vector autoregressive VAR model. A three-variable model was formulated with oil revenues as the third variable.
Their results showed a strong causality from oil revenues and economic growth to trade in the oil exporting countries, while non-oil trade showed no significant effect on GDP in short and long-run. The evidence of his study indicates that exports and economic growth are co-integrated, which confirms the existence of a long run relationship between the two variables. In addition, the evidence seemed to verify the notion that economic growth Granger-causes export growth, but failed to support the export-led hypothesis that export growth causes economic growth.
The results of the study reveal that export expansion leads to economic growth. In the Nigerian context some studies conducted were not quite different from the above studies. Their findings indicate a very weak and infinite impact of non-oil export on economic growth in Nigeria. Their findings suggest that government must diversify the production base of the economy, promote non-oil exports, and build up a viable service infrastructure to drive private domestic and foreign investment.
He also found non-oil export does not Granger cause economic growth in Nigeria. His findings revealed that Nigeria non-oilexport has some significant contribution on economic growth.
Time series data ranging from to and regression analysis was adopted. Findings from the study reveal that non- oil exports have performed weakly. Financial Sector Development and Economic Growth Scholars such as     had emphasized the importance of financials system in economic growth.
The result showed a positive relationship between economic growth in Nigeria and all the capital market development variables used. Using the GMM Generalized Method Moment technique, they observed that financial sector development affects per capital GDP mainly through its role in efficient resource allocation rather than its effect on capital accumulation.
The cointegration and multivariate Granger causality technique adopted showed a unidirectional causality from economic growth to financial development.
The ARDL Autoregressive Distributed Lag and cointegration technique were used, the results showed the presence of a long-run relationship with linkage from domestic private sector credit to economic growth but not vice-versa.
Contribution of Non Oil Exports to Economic Growth in Nigeria (1985-2015)
Their result further indicated evidence of a bi-directional short-run causality between the variables suggesting that private sector credit not only promoted economic growth, but also affected trade balance. The results of the study revealed that financial sector development does not cause poverty reduction and that economic growth causes financial sector growth.
The findings suggest that development of the financial sector, especially the size of banking sector, leads to enhanced economic growth. The Granger causality and cointegration technique applied showed that economic growth Granger causes financial sector development and there are positively related in the long run.
By employing cross-section data analysis during the period to for countries,  examined the relationship between financial sector development and economic growth. They adopted the two-stage least squares 2SLS to address the problem of potential endogeneity in the underlying relationship.
The results of their study indicated that financial sector development has a positive and statistically significant effect on economic growth. The autoregressive distributed lag ARDL technique applied revealed that financial sector development exerts a positive and statistically significant effect on economic growth in Kenya. The findings suggest bidirectional causality between financial sector development and economic growth in Nigeria.
The findings showed that financial sector development has a substantial positive effect on economic growth in Nigeria.