PROMOTING EXPORT DIVERSIFICATION AND ECONOMIC GROWTH IN NIGERIA: CHALLENGES AND OPPORTUNITIES

Abstract

This study explores the impact of export diversification on Nigeria's economic growth,
focusing on the challenges and opportunities for improvement. The objectives are twofold: to
assess the effect of export diversification on economic growth and to examine the short-term
and long-term relationships between the two variables. Using the Auto Regressive Distributed
Lag (ARDL) model with time series data from the World Bank's World Development Indicators
(1981-2021), the results show a positive and statistically significant relationship between
export diversification and economic growth. In both short-term and long-term analyses, exports
are found to significantly drive economic growth, while imports, the balance of payments, and
exchange rate fluctuations present challenges to Nigeria's economic stability. The study
concludes that export diversification plays a crucial role in enhancing economic growth but is
hindered by structural and institutional constraints. Therefore, it is recommended that Nigeria
intensify its efforts in diversifying exports, stabilize its exchange rate, address the balance of
payments issues, and improve the investment climate. Furthermore, strengthening economic
institutions and implementing comprehensive structural reforms are critical for sustaining
diversification and fostering long-term economic resilience.