Economic Diversification and Economic Growth: Evidence from Nigeria

Abstract

In this work, the researchers examine and attempt an answer to the big question; to what extent can Nigeria gain from diversifying the economy? In doing this, the researcher employed time series data spanning about thirty-one years’ period (1980 – 2011). Using the error correction mechanism (ECM), the result points to the fact that, Nigeria could tap from her largely untapped trade potentials for sustained gains, both in the short run and long run. Our findings indicate the fact that this can greatly be achieved through conscious efforts at diversifying the economy, encouraging large-scale industrialization of the non-oil (real) sector of the economy, emphasizing deepening technology in every trade and investment discourse, sustaining the recent improvements in the agricultural sub-sector, amongst other factors.

JEL Classification: B10, C33 F43, F10, L81, L98

Keywords: Nigeria, Non-oil trade, Oil trade, Economic Diversification, Economic Growth, FDIs