Impact of Exchange Rate Volatility on Non-Oil Export Performance in Nigeria

This study empirically investigated the impact of exchange volatility on non oil export performance in Nigeria. The objectives of the study are to determine the impact of exchange rate (naira/dollar) volatility to Nigeria non oil export performance and the speed of adjustment using error correction method (ECM). The study used annual data from 1981 to 2017. The Augmented Dickey Fuller test was used to check for the presence of a unit root in the variables, and the cointegration was used to check if long-run relationship exists among the variables in the model and was carried out using the Johansen technique. The Arch test was used to test for the Arch effect (volatility) in the exchange rate. The ECM was used to determine the speed of adjustment. From the results, it was found that exchange rate has an ARCH effect on non oil export performance in Nigeria and more so, significantly and negatively on it. It was recommended that the managers of the economy should apply policies that can stabilize the exchange rate as the sector has the capability to generate jobs and reduce extreme poverty in the land.

Keywords: exchange rate, volatility, economy, export, performance