Volume: Vol. 10 No. 1 | Page: 55-68
Bayo Fatukasi Ph.D, Moses Oyeyemi Agbede
TRADE OPENNESS VOLATILITY AND ECONOMIC GROWTH IN NIGERIA
Abstract:

The study investigated the impact of trade openness volatility on economic growth in Nigeria. Time series data were used for the study sourced from the Central Bank of Nigeria Statistical Bulletin and World Bank Indicator, which spanned from 1986 to 2017. Considering the volatility of total natural resources rents, oil revenue exchange rate and non-oil export revenue, the study used unit root test, co-integration test and employed Generalized Autoregressive Conditional Heteroskedasity GARCH (1 1) for empirical analysis. The Augmented Dickey Fuller (ADF) and Philips Perron (PP) tests showed that all variables were stationary at first difference at both tests while Johansen co-integration test result showed 5 co-integrating equations at the 0.05 level. The findings revealed that trade openness, total natural resources rents, oil revenue, exchange rate and interest rate impact positively on economic growth. On the other hand, non-oil revenue has negative impact on economic growth. The ARCH term found the presence of volatility clustering in the variables investigated while the GARCH term ascertained the existence of long term persistence volatility in economic growth. Based on the findings, the study recommended adequate policies to improve non-oil export to contribute significantly to economy growth. There is need to diversifying the products base of the economy and building local capacity to make trade openness profitable to Nigeria economy. Effective and efficient channelling of oil revenue to develop other sectors should be prioritised to reduce the impact of volatility clustering on oil revenue in Nigeria.

Keywords: Trade openness volatility, oil revenue, non-oil revenue, economic growth.
Citation: Bayo Fatukasi Ph.D, Moses Oyeyemi Agbede (2018). TRADE OPENNESS VOLATILITY AND ECONOMIC GROWTH IN NIGERIA. African Journal of Educational Technology, Vol. 10 No. 1, 55-68.
Download Full Article