EXCHANGE RATE VOLATILITY AND EXPORT TRADE PERFORMANCE IN NIGERIA (1970-2019)

Abstract

This study examines the exchange rate volatility and export trade performance in Nigeria for the study period of 1970-2019. Unlike previous studies, this study measures exchange rate volatility using standard deviation approach as well as the decomposition of export trade into oil export trade and non-oil export trade. Three specific objectives were tested from the main aim of this study. Secondary time series data used in this study were sourced from the central bank of Nigeria (CBN) Statistical Bulletin and the world development index (WDI). In achieving the specific objectives in this study, descriptive statistics, Autoregressive distributed lags (ARDL) estimate and Granger causality test were used. Results from the descriptive and econometric estimations found that that exchange rate volatility has impact on export trade performance within the study period 1970-2019 in Nigeria. In specific, exchange rate volatility has a positive impact on oil export trade and non-oil export trade respectively but exchange rate has a negative impact on oil export trade and non-oil export trade respectively over the study periods, 1970- 2019 in Nigeria. Finally, the study recommended that recommended that the monetary authority should place more emphasis on exchange rate policies rather than the exchange rate volatility which positively enhances oil and non-export trade performance in the country.