Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021

Umaru Musa; Olutope Olufunso Olorunfemi; David Wazamari Ndagwakwa; Annette Onyebuchi Eze; Daniel Oluwaseun Mimiko; Yakubu Musa; Amechi Henry Igweze; Uyu Eyo Ita

doi:doi:10.11648/j.eco.20231201.11

Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021

Umaru Musa, Olutope Olufunso Olorunfemi, David Wazamari Ndagwakwa, Annette Onyebuchi Eze, Daniel Oluwaseun Mimiko, Yakubu Musa, Amechi Henry Igweze, Uyu Eyo Ita

Published in Economics (Volume 12, Issue 1)

Received: 13 December 2022 Accepted: 29 December 2022 Published: 6 February 2023

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Abstract

This study examined the impact of exchange rate volatility on export in Nigeria. The specific objectives of the study were to evaluate the individual impacts of parallel market-, interbank, real and nominal-exchange rate volatilities on Nigeria’s export. The study employed the ARDL-Error Correction Model and Bound Test using secondary data sourced from the Statistics Database of the Central Bank of Nigeria. Bounds test results for each of the four models, showed long-run relationship among the variables. The results showed that in the long-run, all the exchange rate volatility measures showed negative sign as expected but only the real effective exchange rate volatility was statistically significant in the long run. In the short-run, the average impact of exchange rate volatility was negative in all the four models as expected. However, volatility in real effective exchange rate and nominal effective exchange rate were statistically significant. Finally, if the Nigeria’s export deviates from its long-run path due to short-run perturbations, the tendency for it to return to long-run equilibrium from the four models lied between 25% and 39%. Based on these results, this study recommended that efforts to improve Nigeria’s trade with other countries should consider stabilizing the Naira exchange rate. The Central Bank of Nigeria should shore up reserve accretion as well as diversify the country’s export basket and source for new export destinations.

Published in	Economics (Volume 12, Issue 1)
DOI	10.11648/j.eco.20231201.11
Page(s)	1-14
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Exchange Rate, Volatilities, Export, Nigeria, Real and Nominal Exchange Rate

References

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Umaru Musa, Olutope Olufunso Olorunfemi, David Wazamari Ndagwakwa, Annette Onyebuchi Eze, Daniel Oluwaseun Mimiko, et al. (2023). Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics, 12(1), 1-14. https://doi.org/10.11648/j.eco.20231201.11

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ACS Style

Umaru Musa; Olutope Olufunso Olorunfemi; David Wazamari Ndagwakwa; Annette Onyebuchi Eze; Daniel Oluwaseun Mimiko, et al. Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics. 2023, 12(1), 1-14. doi: 10.11648/j.eco.20231201.11

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AMA Style

Umaru Musa, Olutope Olufunso Olorunfemi, David Wazamari Ndagwakwa, Annette Onyebuchi Eze, Daniel Oluwaseun Mimiko, et al. Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics. 2023;12(1):1-14. doi: 10.11648/j.eco.20231201.11

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@article{10.11648/j.eco.20231201.11,
  author = {Umaru Musa and Olutope Olufunso Olorunfemi and David Wazamari Ndagwakwa and Annette Onyebuchi Eze and Daniel Oluwaseun Mimiko and Yakubu Musa and Amechi Henry Igweze and Uyu Eyo Ita},
  title = {Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021},
  journal = {Economics},
  volume = {12},
  number = {1},
  pages = {1-14},
  doi = {10.11648/j.eco.20231201.11},
  url = {https://doi.org/10.11648/j.eco.20231201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20231201.11},
  abstract = {This study examined the impact of exchange rate volatility on export in Nigeria. The specific objectives of the study were to evaluate the individual impacts of parallel market-, interbank, real and nominal-exchange rate volatilities on Nigeria’s export. The study employed the ARDL-Error Correction Model and Bound Test using secondary data sourced from the Statistics Database of the Central Bank of Nigeria. Bounds test results for each of the four models, showed long-run relationship among the variables. The results showed that in the long-run, all the exchange rate volatility measures showed negative sign as expected but only the real effective exchange rate volatility was statistically significant in the long run. In the short-run, the average impact of exchange rate volatility was negative in all the four models as expected. However, volatility in real effective exchange rate and nominal effective exchange rate were statistically significant. Finally, if the Nigeria’s export deviates from its long-run path due to short-run perturbations, the tendency for it to return to long-run equilibrium from the four models lied between 25% and 39%. Based on these results, this study recommended that efforts to improve Nigeria’s trade with other countries should consider stabilizing the Naira exchange rate. The Central Bank of Nigeria should shore up reserve accretion as well as diversify the country’s export basket and source for new export destinations.},
 year = {2023}
}

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TY  - JOUR
T1  - Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021
AU  - Umaru Musa
AU  - Olutope Olufunso Olorunfemi
AU  - David Wazamari Ndagwakwa
AU  - Annette Onyebuchi Eze
AU  - Daniel Oluwaseun Mimiko
AU  - Yakubu Musa
AU  - Amechi Henry Igweze
AU  - Uyu Eyo Ita
Y1  - 2023/02/06
PY  - 2023
N1  - https://doi.org/10.11648/j.eco.20231201.11
DO  - 10.11648/j.eco.20231201.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 1
EP  - 14
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20231201.11
AB  - This study examined the impact of exchange rate volatility on export in Nigeria. The specific objectives of the study were to evaluate the individual impacts of parallel market-, interbank, real and nominal-exchange rate volatilities on Nigeria’s export. The study employed the ARDL-Error Correction Model and Bound Test using secondary data sourced from the Statistics Database of the Central Bank of Nigeria. Bounds test results for each of the four models, showed long-run relationship among the variables. The results showed that in the long-run, all the exchange rate volatility measures showed negative sign as expected but only the real effective exchange rate volatility was statistically significant in the long run. In the short-run, the average impact of exchange rate volatility was negative in all the four models as expected. However, volatility in real effective exchange rate and nominal effective exchange rate were statistically significant. Finally, if the Nigeria’s export deviates from its long-run path due to short-run perturbations, the tendency for it to return to long-run equilibrium from the four models lied between 25% and 39%. Based on these results, this study recommended that efforts to improve Nigeria’s trade with other countries should consider stabilizing the Naira exchange rate. The Central Bank of Nigeria should shore up reserve accretion as well as diversify the country’s export basket and source for new export destinations.
VL  - 12
IS  - 1
ER  -

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Author Information

Umaru Musa

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Olutope Olufunso Olorunfemi

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
David Wazamari Ndagwakwa

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Annette Onyebuchi Eze

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Daniel Oluwaseun Mimiko

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Yakubu Musa

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Amechi Henry Igweze

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria
Uyu Eyo Ita

Department of Statistics, Central Bank of Nigeria, Abuja, Nigeria

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Umaru Musa, Olutope Olufunso Olorunfemi, David Wazamari Ndagwakwa, Annette Onyebuchi Eze, Daniel Oluwaseun Mimiko, et al. (2023). Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics, 12(1), 1-14. https://doi.org/10.11648/j.eco.20231201.11

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ACS Style

Umaru Musa; Olutope Olufunso Olorunfemi; David Wazamari Ndagwakwa; Annette Onyebuchi Eze; Daniel Oluwaseun Mimiko, et al. Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics. 2023, 12(1), 1-14. doi: 10.11648/j.eco.20231201.11

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AMA Style

Umaru Musa, Olutope Olufunso Olorunfemi, David Wazamari Ndagwakwa, Annette Onyebuchi Eze, Daniel Oluwaseun Mimiko, et al. Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021. Economics. 2023;12(1):1-14. doi: 10.11648/j.eco.20231201.11

Copy | Download

@article{10.11648/j.eco.20231201.11,
  author = {Umaru Musa and Olutope Olufunso Olorunfemi and David Wazamari Ndagwakwa and Annette Onyebuchi Eze and Daniel Oluwaseun Mimiko and Yakubu Musa and Amechi Henry Igweze and Uyu Eyo Ita},
  title = {Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021},
  journal = {Economics},
  volume = {12},
  number = {1},
  pages = {1-14},
  doi = {10.11648/j.eco.20231201.11},
  url = {https://doi.org/10.11648/j.eco.20231201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20231201.11},
  abstract = {This study examined the impact of exchange rate volatility on export in Nigeria. The specific objectives of the study were to evaluate the individual impacts of parallel market-, interbank, real and nominal-exchange rate volatilities on Nigeria’s export. The study employed the ARDL-Error Correction Model and Bound Test using secondary data sourced from the Statistics Database of the Central Bank of Nigeria. Bounds test results for each of the four models, showed long-run relationship among the variables. The results showed that in the long-run, all the exchange rate volatility measures showed negative sign as expected but only the real effective exchange rate volatility was statistically significant in the long run. In the short-run, the average impact of exchange rate volatility was negative in all the four models as expected. However, volatility in real effective exchange rate and nominal effective exchange rate were statistically significant. Finally, if the Nigeria’s export deviates from its long-run path due to short-run perturbations, the tendency for it to return to long-run equilibrium from the four models lied between 25% and 39%. Based on these results, this study recommended that efforts to improve Nigeria’s trade with other countries should consider stabilizing the Naira exchange rate. The Central Bank of Nigeria should shore up reserve accretion as well as diversify the country’s export basket and source for new export destinations.},
 year = {2023}
}

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TY  - JOUR
T1  - Impact of Exchange Rate Volatility on Export in Nigeria: 2008 – 2021
AU  - Umaru Musa
AU  - Olutope Olufunso Olorunfemi
AU  - David Wazamari Ndagwakwa
AU  - Annette Onyebuchi Eze
AU  - Daniel Oluwaseun Mimiko
AU  - Yakubu Musa
AU  - Amechi Henry Igweze
AU  - Uyu Eyo Ita
Y1  - 2023/02/06
PY  - 2023
N1  - https://doi.org/10.11648/j.eco.20231201.11
DO  - 10.11648/j.eco.20231201.11
T2  - Economics
JF  - Economics
JO  - Economics
SP  - 1
EP  - 14
PB  - Science Publishing Group
SN  - 2376-6603
UR  - https://doi.org/10.11648/j.eco.20231201.11
AB  - This study examined the impact of exchange rate volatility on export in Nigeria. The specific objectives of the study were to evaluate the individual impacts of parallel market-, interbank, real and nominal-exchange rate volatilities on Nigeria’s export. The study employed the ARDL-Error Correction Model and Bound Test using secondary data sourced from the Statistics Database of the Central Bank of Nigeria. Bounds test results for each of the four models, showed long-run relationship among the variables. The results showed that in the long-run, all the exchange rate volatility measures showed negative sign as expected but only the real effective exchange rate volatility was statistically significant in the long run. In the short-run, the average impact of exchange rate volatility was negative in all the four models as expected. However, volatility in real effective exchange rate and nominal effective exchange rate were statistically significant. Finally, if the Nigeria’s export deviates from its long-run path due to short-run perturbations, the tendency for it to return to long-run equilibrium from the four models lied between 25% and 39%. Based on these results, this study recommended that efforts to improve Nigeria’s trade with other countries should consider stabilizing the Naira exchange rate. The Central Bank of Nigeria should shore up reserve accretion as well as diversify the country’s export basket and source for new export destinations.
VL  - 12
IS  - 1
ER  -

Copy | Download