ABSTRACT
This work is a research
geared towards export diversification strategy for economic growth in Nigeria.
The Nigeria economic growth has been hampered because of restricted export
diversification arising from its export mono-product stance, a complete shift
from hitherto exportable goods before the discovery of crude oil in late 1950’s
despite the great potentials and abundance of human material and natural
resources in the country. The economy has consistently remained in doldrums
because of the aforementioned reason and steps are now being taken to find out
solution to ensure maximum growth, the objective of this research is to achieve
optimum diversification in export and positive economic growth to effectively
do this certain relevant textbooks were viewed to have a good grasp of the
historical trends of export activities and ensure an up to date knowledge of
it.
Data were collected from
published reports of Central Bank of Nigeria (CBN) in pursuance of this study
this research will be highly beneficial to the government in a bid to develop
the economy further and individuals willing to engage in international (export)
business also international managers will be able to draw on the information
there in for export process.
TABLE OF CONTENTS
Certification
Dedication
Acknowledgement
Abstract
Table of
Contents
CHAPTER ONE: INTRODUCTION
1.1
Background of the Study
1.2
Statement of the Study
1.3
Objective of the Study
1.4
Significance of the Study
1.5
Scope of the Study
1.6
Methodology of the Study
1.7
Hypothesis of the Study
1.8
Limitation of the Study
1.9
Structure of the Study
References
CHAPTER TWO: LITERATURE
REVIEW
2.1
Conceptual Issues
2.2
Export Diversification and Economic Growth
2.3
Nigeria Export Performance
2.4
Economy-Wide Performance
2.5
Export Promotion Measures in Nigeria
2.6
Export Financing in Nigeria
2.7
Export Infrastructures in Nigeria
2.8
Constraints on Nigeria’s Export
References
CHAPTER THREE:
THEORETICAL FRAMEWORK
AND MODEL SPECIFICATION
3.1
Theoretical Framework
3.1.1 Heckscher-Ohlin
Theory of Factor Endowments
3.1.2 Prebisch-Singer
Thesis
3.1.3 Linder’s Theory of
Volume of Trade
3.2
Model Specification
3.3
Source of Data
3.4
Model Estimation Techniques
CHAPTER FOUR: DATA
ANALYSIS
AND PRESENTATION
4.1
Presentation of Result
4.2
Interpretation of Result
4.3
Policy Implication
References
CHAPTER FIVE: SUMMARY
RECOMMENDATIONS
AND CONCLUSION
5.1
Summary
5.2
Recommendations
5.3
Conclusions
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
Nigeria is located in
the Western part of Africa lying in the tropics between latitudes 40 and
140 North of the equator and longitudes 30 and
140 East of the Greenwich meridian. The country has a total
land area of 9, 323,768 square kilometres with a multi-ethnic population of
approximately 120 million people. The country is bounded in the West by
Republic of Benin, in the East by the Republic of Cameroon, in the North by the
Republic of Niger and the Coastline in the South is berthed by the Atlantic
Ocean. A conspicuous feature of the country is that of extensive arable farm
and grazing land for animal husbandry from the North to South, East to West.
The country’s vegetation is made up of high zone forest (covering one sixth of
the country) and the Savannah, the high forest zone is further made up of the
mangrove or swamp and the rain forest, while the Savannah s made up of
grassland and scrub forest. The country possesses extensive endowment of
largely exportable mineral resources and an array of neutral stuffs. Nigeria is
endowed with vast and largely untapped natural resources including such
minerals as petroleum, limestone, tin, columbite kaolin, gold and silver, coal,
lead, zinc, gypsum, clay, shale, marble, iron-ore, stone, zircon and natural
gas, the abundance human resources and the geographical features of the
beautiful plateau with steep escarpment, cold, warm springs vast game
reserves, waterfalls, river confluence’s and various other tourism potentials
and veritable sources of foreign exchange earnings. Sincerely the above
opportunities should have naturally put Nigeria at a vantage position as one of
the leading nations of the world. Notwithstanding the above, Nigeria is still
struggling hard to come out of the economic doldrums caused by political
imbroglio, corruption, bad leadership deficient policies, planning, economic
myopism etc the era has now come in Nigeria history when competent international
managers and leaders must seek relevance and look for frantic ways to bail the
country out of her economic predicaments. The statistical evidence for today’s
developing countries (particularly Nigeria) is not unequivocal as it supports
the hypothesis that the growth of export plays a major role in the economic
growth process by stimulating demand, encouraging savings and capital
accumulation. Export increases the supply potentials of the economy by raising
the capacity to import.
Historically, and in the
contemporary world exchange between different economies has been the engine
room of growth there is almost no country that has for a long period sustained
a growth rate substantially higher than its growth exports. It is claimed that
the growth rate of developing countries since 1950 correlate better with export
performance than any other single economic indicator. Developing countries such
as Puerto Rico, Japan and Hong Kong have certainly achieved remarkable growth
in export of their manufacturing sectors. There is a consensus among economic
historians that in the 19th century export trade acted a
catalyst of growth as it contributed to the optimal utilization of resources
within countries economies of scale and it transmitted growth from one part of
the world to another. The demand in Europe and Britain in particular, for raw
materials brought prosperity to such countries as Canada, Argentina, South
Africa etc as the demand for their commodities increased, investment in these
countries also increased and arable was mutually profitable.
In Nigeria, in terms of
exports and economic growth, we have travelled from the point where in 1960,
agricultural and crude oil exports contributed some 89% and 2.7% respectively
of our foreign exchange to where they now account for about 2.5% and over 90%
respectively prior to the 1970s, agricultural exports were Nigeria’s main
source of foreign exchange. During this period, Nigeria was a major exporter of
cocoa, cotton, palm oil, palm kernel, groundnuts and rubber and in the 1950s
and 1960s 3%-4% annual output growth rates for agricultural and food crops were
achieved. Government revenues also depended heavily on taxes on those exports.
Thus, during the period the current account and fiscal balances depended or the
agricultural sector. However, between, 1970 and 1974, agricultural export as a
percentage of total exports declined from about 43% to slightly over 70%. From
the mid 1970s, the average annual growth rate of agricultural exports declined
by 17%. The major cause of this development was oil price shocks of 1973-1974
and 1979, which resulted in large receipts of foreign exchange by Nigeria and
the neglect of agriculture. The oil boom afflicted the Nigeria economy with the
so called Dutch disease (Harberger, 1983) the petroleum sector exhibited an
increasing and dominant influence as regards contribution to government
revenue, rising from 1% in 1960 to over 90% as of now. Because of the vulgarise
of oil, we have now forcefully re-discovered that the excessive reliance on
crude oil export at the detriment of the previous composite vector of the
“traditional” primary export, though more lucrative does not provide secure
foundations for prosecuting deliberate development policy. (Alli 1994).
Fuelled by the crude oil exports, the domestic economy nominally recovered
rapidly from civil war disequilibrium and sustained unprecedented growth rate
of Gross Domestic Product (GDP) up to 1990s presently, there is need to
diversify from crude oil export to other sectors of the economy due to
fluctuation in oil prices. Hence, exports diversification from total reliance
on the crude oil export is now necessary to achieve rapid economic growth.
1.2
STATEMENT OF THE PROBLEM
Every country will have
to achieve a growth rate consistent with her balance of payments equilibrium on
current account and with its overall balance on the current and capital
account, since trade (with emphasis on exports) is the engine of growth export
promotion must be the focus of any country that intends to achieve a desirable
level of economic growth.
Over the year, export
diversification has proved to be a successful strategy of improving the level
of exports and economic growth of many countries in the world. This has been a
lesson for most developing countries particularly in Nigeria. Therefore, the
issue is whether diversification should be undertaken in the oil export sector
or non-oil export sectors of the economy. To determine this, a critical
analysis of the performance of these sectors of the economy overtime is
absolutely necessary.
1.3
OBJECTIVE OF THE STUDY
Given the role of export
in the achievement of a desirable economic growth of a country, and also the
role of export diversification. In achieving increased level of export, the
objective of the study is the optimal export diversification to achieve
increased level of exports which will in turn lead to economic growth in
Nigeria, also to discover other sectors of the economy which will improve our
foreign exchange earnings.
1.4
SIGNIFICANCE OF THE STUDY
This study will
highlight the contribution of various exportable commodities to the Gross
Domestic Product (GDP) of the Nigerian economy over the years. It will also
help in the allocation of the available resources of the country for export
purposes. The findings of this study will be a basic for achieving economic
growth in Nigeria.
1.5
SCOPE OF THE STUDY
Given the availability
of data necessary for the success of this study the study has been designed to
examine the performance of the oil export and non oil export sectors. This
study will focus mainly on export diversification strategy for economy Growth
in Nigeria and for the purposes of empirical analysis, the time frame of 25
years (1980-200%) shall be taken.
1.6
METHODOLOGY OF THE STUDY
The study will involve
the used of secondary data, the data will be obtained from various issues of
the CBN statistical bulletins and other sources of data relevant to the study.
The data obtained will
be analysed using the co-integration and error correction model from which
conclusion will be draw on the basic of the estimated model the reason for the
adoption of co-integration techniques is based on the existence of
non-stationary of most time series data the flexibility richness and efficient
estimates of co-integration for the adoption of the approach.
1.7
HYPOTHESIS OF THE STUDY
A hypothesis would be
adopted which would be examined to determine the validity of our model.
1. H0 =
0 Export diversification will lead to an
increase in the level of Gross Domestic Product (GDP) of the economy.
H1 ¹ 0
Export diversification will not lead to an increase in the level of Gross
Domestic Product (GDP) of the economy.
2. H0 =
0 Non-oil
Export diversification will lead to an increase in the level of Gross Domestic
Product (GDP) of the economy.
H1 ¹ 0
Non-oil export diversification will not lead to an increase in the level of
Gross Domestic Product (GDP) of the economy.
Department | Banking and Finance |
Project ID Code | BFN0242 |
Chapters | 5 Chapters |
No of Pages | 114 pages |
Methodology | Ordinary Least Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦5000, $15 |
|
|
Contact Us On | +2347043069458 |