Exchange Rate Volatility and Its Significant Impact on Nigeria’s Non-Oil Exports and Economic Growth Prospects (1990-2024)

This study examines the effect of exchange rate volatility on non-oil export performance in Nigeria using annual data covering the period 1990 to 2024, obtained from the Central Bank of Nigeria (CBN) statistical bulletin. The Autoregressive Conditional Heteroskedasticity (ARCH) and Generalized ARCH (GARCH) models were employed, given their suitability for analyzing high-frequency and volatile macroeconomic series such as exchange rate, interest rate, and inflation rate. In the models, exchange rate, interest rate, and inflation rate were specified as independent variables, while food crop exports, cash crop exports, and solid mineral exports served as dependent variables, enabling a sectoral assessment of non-oil export performance. The empirical results indicate a positive and significant relationship between exchange rate movements and non-oil exports, confirming that volatility in the exchange rate plays a substantial role in shaping Nigeria’s export outcomes. The findings underscore the need for targeted policy interventions. It is recommended that the government intensify revenue diversification efforts to enhance the capacity of the non-oil sector, while the monetary authorities focus on ensuring exchange rate stability to curb inflationary pressures that can undermine export growth and competitiveness.