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Exchange Rate Policy and Non-Oil Exports in Nigeria: Evidence of Asymmetric Effects

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  • Rosemary Ngozi Okoh

    (Department of Agricultural Economics, Delta State University, Abraka, Delta State, Nigeria)

Abstract

This study is aimed at delineating the asymmetric effects of exchange rate policy on non-oil exports in Nigeria. Monthly time series data for the period, January 2008 to M, 2024, a total of 196 observations were obtained from Central Bank of Nigeria, Trading Economics and National Bureau of Statistics. The Cointegrating Nonlinear ARDL model with partial sum decomposition of exchange rates was employed. To capture the effect of other relevant macro-economic variables, relative prices, world income, and Nigeria’s foreign reserves representing its capacity to produce exports, entered the model as fixed regressors. The cumulative dynamic multiplier (CDM) was employed to assess the overall impact of the exchange rate shock in order to decipher how non-oil exports adjust to equilibrium after a shock. The study found that there exists a nonlinear and asymmetric relationship between exchange rates and non-oil exports in the short-run. The error correction term (ECM) was appropriately negatively signed and highly statistically significant at the 1% level, implying that non–oil exports and exchange rates are nonlinearly cointegrated in the long-run. The symmetry test rejected the null hypothesis of symmetry in the response of non-oil exports to positive and negative changes in the short run, but failed to reject it in the long run, suggesting that in the short run exchange rate has asymmetric effect on non-oil exports. The results further show that both positive and negative changes in exchange rate were contractionary, probably due to structural, infrastructure and supply side constraints. Asymmetric plot of the CDM confirms the existence of asymmetric effects of exchange rate changes on non-oil exports in Nigeria with the impact of the negative shocks on non-oil exports being much higher than those of the positive shocks. The policy implication is that policy makers may have to consider exchange rate stabilization in order to expand and diversify non-oil exports in Nigeria.

Suggested Citation

  • Rosemary Ngozi Okoh, 2026. "Exchange Rate Policy and Non-Oil Exports in Nigeria: Evidence of Asymmetric Effects," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(6), pages 4100-4113, June.
    • Handle: RePEc:bcp:journl:v:10:y:2026:i:6:p:4100-4113
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