A Bounds Test Approach to the Evaluation of Non-Oil Exports and Economic Growth in Nigeria

Abstract
This study examined the relationship between non-oil exports and economic growth in Nigeria for the period 1981 to 2019 using ARDL/Bounds testing approach to analyse data sourced from the CBN statistical bulletin.The ADF stationary test showed that all the variables attained stationarity after first difference except gross domestic product which was stationary at levels.The bounds test confirmed the existence of a long run association amongst the variables in the model.Non-oil export and economic growth were positively related in both the long run and short run. While the long run revealed an insignificant relationship, a significant relationship was observed in the short run. Trade openness showed evidence of positive and insignificant relationship with economic growth both in the long run and in the short run period while exchange rate revealed a positive and significant relationship with economic growth both in the long run and in the short run period. The R2 value indicates that 58 percent of the systematic variation in economic growth is explained by non-oil export, trade openness and exchange rate in Nigeria over the period under study. Based on these results, the study recommends: the diversification of the productive base of the nation to boost domestic capital formation needed for investment, prudent utilization of borrowed funds to reduce poverty to the barest minimum and more efficient debt management strategies to ensure that borrowed funds are directed to more productive channels in the economy to stimulate growth and improve the living standard of people.