Economic Growth through the Lens of Non-Oil Export in Nigeria, 1970 – 2010

Abstract

This study examined economic growth through the lens of non-oil export in Nigeria from 1970 to 2008. It was prompted by incessant insignificant contribution of non-oil export to economic growth of Nigeria from 1970 to 2008. The overall objective of the study is to ascertain the impact or influence of non-oil export on Gross Domestic Product by way of finding, if any, the relationship between economic growth and non-oil export through an economic lens. In order to achieve these objectives, research questions were raised and hypotheses were formulated. For these raised issues to be addressed, econometric analysis of Ordinary Least Squares regression method (multiple regression analysis) and the co-integration/error correction technique. The findings of the study include money supply is positively related to economic growth. This implies that an increase in money supply stimulates growth. This is in agreement with our expectation and economic theory. An increase in money supply spurs growth by making investment funds available at a reduced rate to investors. At a lower interest rate people borrow more that is as investment increases, production and output also raises leading to a rise in economic growth. Also, the result of our analysis indicates that non-oil export and money supply are positively related to economic growth. On the other hand credit to the private sector was found to be negatively related to economic growth. Based on the findings, it is therefore recommended that Government should increase investment in non-oil sector; because our result shows that non-oil export is positively related to economic growth but insignificant at 5 percent level. An increase in investment by both private and the government in real sector like agriculture, industry and manufacturing will help boost economic growth through employment creation, output stimulation and improvement in income level. The real sector remains the key avenue for rapid and sustained growth in an economy be it developed or developing countries. The monetary authorities should reduce lending rate to single digit may help stimulate investment and economic growth in the country. We therefore conclude that rise in these variables can stimulate growth while a fall, reduces economic growth. On the other hand credit to the private sector was found to be negatively related to economic growth.

Keywords:Economic Growth, Non-oil Export Agriculture, Employment Creation, Stimulation Income Level.