Exchange Rate Volatility and Sectoral Export of Nigeria: Case of Oil and Non-Oil Sectors

Abstract

The study explored the effects of exchange rate volatility on the exports performance of both oil and non-oil sectors. The paper employed the econometrics method of GARCH in measuring volatility of exchange rate and seemingly unrelated regression method (SUR) in estimating the coefficient of the two system equation. ARCH and GARCH results suggested that the exchange rate is volatile , while SUR model shows that exchange rate has negative effect on the two sectors , though statistically not significant. Therefore, for the country export to improve, the country should adopt inward looking policy in order to enhance her capability to export and reduce the vulnerability of the country to the external shocks. This research will go a long way in addressing the behavior of Nigeria export in a correlated innovation and shocks system that goes along with international trade flows