NATURAL GAS EXPORTS AND NIGERIA’S FOREIGN RESERVES GROWTH

Abstract

This research examined the contribution of natural gas exports to Nigeria's foreign reserves in
the past two decades using data on Natural Gas export, foreign reserves trends, exchange rate
and GDP growth. The study covered 2000 through 2022. Methods of analyses include
descriptive statistics, ADF test for stationarity, Error Correction analysis and the Granger
causality. The research found that gas export positively impact foreign exchange reserve. The
estimated ECT -1 established that 104% of existing dis-equilibrium between the short and long
term dynamics were adjusted annually among the series. The study recommends that Nigeria
needs to intensify efforts toward developing its gas industry so as to be reckoned with as a
major supplier at the international scene, who is capable of meeting the needs of both domestic
and international markets, and thus increase its foreign reserve through gas exports.