NON-OIL EXPORT PROMOTION AND MANUFACTURING VALUE-ADDED IN NIGERIA AND SOUTH AFRICA: A TALE OF TWO COUNTRIES

Abstract

This paper utilized the Non-Linear Autoregressive Distributed Lag (NARDL) cointegration technique to conduct a comparative analysis of the non-oil export promotion and manufacturing value-added nexus in Nigeria and South Africa from 1981-2022. Our results show that in the short run, positive and negative non-oil export shocks positively impact the manufacturing sector value added in Nigeria and South Africa, respectively, as the same feat was recorded in the long run. The Wald test affirmed an asymmetric association between the two countries' non-oil export and manufacturing value-added nexus. In the long run, manufacturing value added reacted negatively to Nigeria's lending rate, while it was a positive response in South Africa. Given the positive impact of domestic credit on Nigeria's manufacturing sector, policymakers should explore alternative funding options from international donor financial institutions like the African Export-Import Bank (AFREXIM) and Africa Development Bank (AfDB) as part of the Bank's intervention programmes. The governments of Nigeria and South Africa should support initiatives to broaden export sectors by reducing reliance on specific industries and enhancing resilience to global market changes