SUMMARY OF FINDINGS
In this study, the focus has being on
impact of export promotion on the economic growth of Nigeria. The purpose of
the research has been to present a simplified picture of the real situation
before planners and policy makers for a meaningful national economic planning.
The researcher assessed the export-income (GDP) relationship as well as the
role of import and exchange rate to income (GDP) in Nigeria.
On the application of advanced
statistical techniques employed, the following information surfaced;
·
The entire
regression plane is statistically significant. This means that there is joint
influence of the explanatory variables on the dependent variable
(GDP). That is
1% increase in export rate, import rate and exchange rate will on the average
lead to an increase by 0.6%, .10% and .03% increase in Gross Domestic Product
respectively. In accordance with the analysis it was observed that export
promotion has a significant effect on the economic growth of Nigeria. As a result export promotion should be
encouraged in Nigeria so as diversify the export base of Nigeria.
·
The computed
coefficient of determination shows that 77.78% of the total variations in the
dependent variable (LGDP) is influenced by the variation in the explanatory
variables namely Export rate, Import rate and Exchange rate
·
The total variation
of 22.22% in the dependent variable is attributable to the influence of other
factors not included in the regression model.
·
There is evidence of first-order serial correlation (autocorrelation).
It implies that there are other variables which explain export promotion that are
not captured in the model.
Empirical findings:
From
the research empirical findings it was revealed that export promotion have a
positive effect on the growth of the economy. This is evidence from the works
by Tyle (1981) which revealed a positive correlation between growth and export expansion
as well as capital formation and economic growth.
Also
it is revealed from the empirical findings that non-oil export on the whole
have performed below expectation thereby questioning the efficiency of the
export promotion strategies in Nigeria since Nigerian economy is far from being
diversified away from crude oil export. This result supports the argument made
by Subasat (2002) that export promotion does not have any significant import on
the economic growth of low income country.
Nigeria, as a low income country experiencing fluctuation in the export
values will not be able to make successful economic plans that will translate
into sustainable growth. On the contrary Olorunshola (1996) in view that export
promotion will act as stimulus to efficiency as a result of foreign
competition, and technology thereby resulting in economies of scale. This kind
of experience is absent in Nigerian because non-oil exports are primary
products that are not competitive with manufactured goods in the market.
RECOMMENDATIONS
Prior to our policy implications, the
following recommendations are necessary for Nigeria to increase her
export-earnings for sustainable economic development.
·
Diversification of
export markets of south Africa, Eastern Europe and ECOWAS states should be emulated
as such will enhance the elimination of the mono-cultured oil economy of Nigeria
·
There should be a
development of both manufactured and primary export by the government. This
will lead to adequate implementation of appropriate macro-economic policies
designed to minimize built in distortions in the system so as to reduce both
internal and external imbalances such as re-emergence of over valued exchange
rate which makes export unprofitable.
·
The (NEXIMB) should
as a matter of urgency embark on the provision of risk-bearing facilities to
minimize export risks. In so doing, it will encourage the commercial banks to
provide direct non-oil export goods.
·
At the policy
level, there is need to exploit this reality through appropriate export incentives
such as export subsides, removal of export taxes especially on non-oil export
and special foreign exchange arrangement for exporters.
·
There should be
forward and backward linkages that will reduce cost to ensure that manufactured
export business remains profitable.
CONCLUSION
In conclusion of our research work,
the most promising route for the economy is outward-orientated-strategy or
export promotion – export-led growth. Aside from the advantages such as a rapid
growth rate, increased and sustained growth rate had dynamic effects in the
economic and did not merely produce static gains from improved allocation of
resource, it would enable the country to realize the fruit of international
trade according to comparative advantage particularly in the solid mineral
sub-sector, establish plants of economically efficient size and to maintain
long production runs improving capacity utilization and attract foreign direct
investment, which is an important need of the nation so as to utilize locally
available capital.
Above all, both government and private
sector required a deliberate effort to incorporate critical measures that will boost
export particularly non-oil export or the growth of the economy.
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THIS PROJECT WORK WAS WRITTEN BY
AND SUBMITTED TO THE DEPARTMENT OF ECONOMICS
DECEMBER 2010