Achieving Inclusive Growth in Nigeria through Exports: An Empirical Investigation

Abstract

The study investigated the effectiveness of export in the attainment of inclusive growth in Nigeria. The study functionally expressed inclusive growth as a function of oil export, non oil export, investment and foreign direct investment. In order to achieve the objectives of the study, a number of literature were reviewed, however, there were empirical regularities in the literature embracing inclusive growth as critical determinant of sustainable growth. Within the context of secondary data which spanned the period 1970-2016, the study utilized econometric technique to analyze inclusive growth model. In the model, real per capita income (proxy inclusive growth) is expressed as a function of oil exports, non oil export, investment and foreign direct investment. In particular, a number of diagnostic tests were carried out on the data before estimation in order to prevent spurious results. These include the unit root test, co-integration test and vector error correction tests. The stationarity test indicated that the data were stationary at first difference, while the co-integration test suggested long run co movement among the variables. In addition, the vector error correction model indicated the relationships among the inclusive growth fundamentals. Findings from the results indicated that in the long run, the coefficients of oil and non oil exports have negative effect on inclusive growth (proxied by real GDP per capita) while investment and foreign direct investment impacted positively on inclusive growth, while in the short run, oil exports and non oil export positively and significantly influenced inclusive growth in Nigeria. This study further suggested that government should intensify policy towards stimulating oil export and promote foreign investment inflows. More so, policy thrust should also embrace diversification of the economic base from monolithic base structure to agriculture.