The Dominant Impact of Oil Exports on Economic Growth in Nigeria: A Comparative ARDL Analysis with Non-Oil Exports

This study comparatively investigated the relative impacts of oil and non-oil exports on Nigeria’s economic growth from 1981 to 2023. An ex-post facto research design was used. Multiple regression analysis was adopted, in which the Autoregressive Distributed Lag (ARDL) was applied. The results showed the presence of long-run relationships among the variables (GDP, oil exports, non-oil exports, and inflation rate), indicating that about 11% of the short-run imbalance is corrected every year. Further findings revealed that oil exports have a positive impact on Nigeria’s GDP in both the short and long runs, while non-oil exports have a negative impact on Nigeria’s GDP in both the short and long runs. The finding that non-oil exports have a negative impact on Nigeria’s economic growth is quite surprising, given the general expectation that diversification away from oil dependence should foster economic expansion. This unexpected outcome constitutes a major contribution of the study, as it challenges the prevailing notion that promoting non-oil exports automatically enhances growth. This research concludes that oil exports have more impact on Nigeria’s economic growth than non-oil exports over the studied period. The study therefore recommends, among others, that the Nigerian government should stabilize and strengthen oil export earnings by investing in upstream oil production and infrastructure, and diversify its non-oil exports by focusing on processed and value-added commodities for increased economic growth.