Citations


Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062
USA

Conference List

Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy

NDUBUAKU Victor C.

,

ONWUKA Kizito

,

ONYEDIKA Chukwuka

,

CHIMEZIE Isabella Chinonye

NDUBUAKU Victor C. 1 ,

ONWUKA Kizito 1 ONYEDIKA Chukwuka 1 CHIMEZIE Isabella Chinonye 1 
  1. Department of Accountancy, Federal College of Agriculture Ishiagu, Ebonyi State, Nigeria. 1

Pages: 21-36

DOI: 10.18488/journal.26.2019.81.21.36

Share :

Article History:

Received: 17 December, 2018
Revised: 24 January, 2019
Accepted: 28 February, 2019
Published: 03 May, 2019


Abstract:

The study investigated the impact of exchange rate fluctuation on selected economic sectors of the Nigerian economy. The study covered the agricultural (AGDP), manufacturing (MGDP), petroleum (PGDP) and service sector (SGDP) of the Nigerian economy. The petroleum sector represented the oil sector while the agricultural (AGDP), manufacturing (MGDP), and service sector (SGDP) represented the non-oil sector. The main objective of the study was to determine whether exchange rate fluctuations had a significant impact on the selected sectors of the economy. These sectors were invariably the largest contributors to the GDP. The time scope covered 1981-2016. Data for the study were obtained specifically from CBN statistical bulletin (2016). The data were analysed using the Auto Regressive Distributed Lagged (ARDL) model. The study concluded that there was no significant impact of exchange rate on AGDP, MGDP and SGDP respectively. However, there was a positive and significant impact of exchange rate on PGDP. The study recommended that Nigeria’s economy should be diversified to enable the non-oil sector to become significant foreign exchange earners.
Contribution/ Originality
This study contributes to the existing literature by unbundling Nigeria’s economy into its component sectors and determining the impact of exchange rate fluctuations on each sector. This study uses a relatively new estimation methodology of Auto-Regressive Distributed Lagged model (ARDL). This study originates a new formula which integrates lagged variables into the model.

Keywords:

ARDL, Exchange rate, Inflation rate, Agriculture, Manufacturing, Petroleum, Economic growth, Nigeria.

Reference:

Adeniran, J.O., S.A. Yusuf and O.A. Adeyemi, 2014. The impact of exchange rate fluctuation on the Nigerian economic growth: An empirical investigation. International Journal of Academic Research in Business and Social Sciences, 4(8): 224-233.Available at: https://doi.org/10.6007/ijarbss/v4-i8/1091.

Akinlo, O.O. and Q.A. Lawal, 2015. Impact of exchange rate on industrial production in Nigeria 1986-2010. International Business and Management, 10(1): 104-110.

Akpan, E.O. and J.A. Atan, 2012. Effects of exchange rate movements on economic growth in Nigeria. CBN Journal of Applied Statistics, 2(2): 1-14.

Azeez, B.A., F.T. Kolapo and L.B. Ajayi, 2012. Effect of exchange rate volatility on macroeconomic performance in Nigeria. Interdisciplinary Journal of Contemporary Research in Business, 4(1): 149-155.

Bakare, A.S., 2011. The consequences of foreign exchange rate reforms on the performances of private domestic investment in Nigeria. International Journal of Economics and Management Sciences, 1(1): 25-31.

Gatawa, N.M. and A. Mahmud, 2017. Impact of exchange rate fluctuations on agricultural Exports (Crops) in Nigeria. International Journal of Humanities and Social Science Invention 6(3): 65-71.

Inoue, T. and S. Hamori, 2009. What explains real and nominal exchange rate fluctuations? Evidence from SVAR analysis for India. Economics Bulletin, 29(4): 2803-2815.

Jibrin, A.A., G. Jelilov and Y. Gayypov, 2017. Exchange rate and economic growth in economic community of West African States (ECOWAS). The Empirical Economics Letters, 16(5): 519-529.

Jongbo, O.C., 2014. The impact of real exchange rate fluctuation on industrial output in Nigeria. Journal of Policy and Development Studies, 9(1): 268-278.

Kalu, E.U., O.E. Ugwu, V.C. Ndubuaku and O.P. Ifeoma, 2019. Exchange rate and foriegn reserves inerface: Expirical evidence from Nigera. The Economics and Finance Letter, 6(1): 1-8.

Kogid, M., R. Asid, J. Lily, D. Mulok and N. Loganathan, 2012. The effect of exchange rates on economic growth: Empirical testing on nominal versus real. The IUP Journal of Financial Economics, 10(1): 7-17.

Korkmaz, S., 2013. The effect of exchange rate on economic growth. 2nd International M-Sphere Conference for Multidisciplinarity in Science and Business. Dubrovnik, Croatia: M-Sphere. pp: 33.

McPherson, M.F. and T. Rakovski, 2000. Exchange rates and economic growth in Kenya: An econometric analysis. United States Agency for International Development, Bureau for Africa, Office of Sustainable Development. Washinton D.C.: African Economic Policy Discussion Paper No. 56.

Mordi, N.O., 2006. Challenges of exchange rate volatility in economic management in Nigeria. CBN Bullion, 30(3): 17-25.

Ngerebo-a, T.A. and R.C. Ibe, 2013. Exchange rate and macroeconomic performance in Nigeria: A causal post structural adjustment programme investigation. Global Journal of Management and Business Research Finance, 13(7): 42-48.

Obi, K.O., J.O. Oniore and K.U. Nnadi, 2016. The impact of exchange rate regimes on economic growth in Nigeria. Journal of Economics and Sustainable Development, 7(12): 115-127.

Olufayo, M.B. and B.A. Fagite, 2014. Exchange rate volatility and sectoral export of Nigeria: Case of oil and non-oil sectors. Journal of Economics and Sustainable Development, 5(10): 66-75.

Osaka, G., I. Masha and E. Adamgbe, 2003. Issues in exchange rate policy: Economic and political considerations. In O. J. Nnana, S. O. Alade, & F. O. Odoko, Contemporary Economic Policy Issues. Abuja: Central Bank of Nigeria.

Oyovwi, D.O., 2012. Exchange rate volatility and economic growth in Nigeria. Mediterranean Journal of Social Sciences, 3(3): 399–407.

Rodrik, D., 2008. The real exchange rate and economic growth. Working Paper MA 02138, Harvard University, John F. Kennedy School of Government, Cambridge.

Shehu, A.A. and Z. Youtang, 2012. Exchange rate volatility, trade flows and economic growth in a small open economy. International Review of Business Research Papers, 8(2): 118–131.

Takaendesa, P., 2006. The behaviour and fundamental determinants of the real exchange rate in South Africa. Unpublished Master’s Thesis, Rhodes University.

Tiwari, P. and P. Sharma, 2015. Trade liberalization and economic growth in China since 1980. IOSR Journal of Economics and Finance, 6(5): 1-08.

Ufoeze, L.O., C.N. Okuma, C. Nwahoby and U.B. Alajekwu, 2018. Effect of foreign exchange rate fluctuations on Nigerian economy. Annals of Spiru Haret University Economic Series, 18(1): 105-122.Available at: https://doi.org/10.26458/1814.

Usman, O.A. and A.T. Adejare, 2012. The effects of foreign exchange regimes on industrial growth in Nigeria. Global Advanced Research Journal of Economics, Accounting and Finance, 1(1): 1–8.

Statistics:

Google Scholor ideas Microsoft Academic Search bing Google Scholor

Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

All authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Impact of Labour, Capital and Human Resources in Productivity of Transport Firms in Nigeria
( 2 ) The Impact of Investment Climate Reforms on the Development of Small and Medium Sized Enterprises in Nigeria: A Policy Brief
( 3 ) The Impact of Human Capital on Economic Growth: Evidence from Tunisia Using Star and Stecm Models
( 4 ) Impact of Food Beverage Price Index and Exchange Rate Volatility on Economic Growth
( 5 ) Impact of Microfinance Lending On Economic Growth of Third world Nations: Study of Nigeria
( 6 ) The Impact of Rice Production, Consumption and Importation in Nigeria: The Political Economy Perspectives
( 7 ) The Impact of Dividend Policy on Shareholders’ Wealth before and After Financial Melt down: Evidence from FMCG Sector in India
( 8 ) Factors Impacting on SMEs Internationalization: Dairy Industry in Zimbabwe
( 9 ) The Life-Time of Tomorrow Party of Japan and Its Negative Impacts on the Anti-Nuclear Movements in Japan’s Politics
( 10 ) An Assessment of the Impact of Information Communication Technology (ICT) On the Administration of Public Records: A Case Study of the Bolgatanga Municipal Assembly in the Upper East Region of Ghana-West Africa
( 11 ) Impact of Inflation on Per Capita Income in Emerging Economies: Evidence from BRICS Nations
( 12 ) The Impact of the Global Financial Crisis on the Debt, Liquidity, Growth, and Volume of Companies in Palestine Stock Exchange
( 13 ) The Impact of the Decline in Oil Prices in Latin America
( 14 ) Measuring the Quality of Islamic Banks Services and Its Impact on Customers Satisfaction A Survey Study on the Islamic Banks Customers in Lattakia-Syria
( 15 ) The Indirect Impact of Overconfidence on the Performance of Tunisian Firms Through their Financing Structure
( 16 ) Impact of FDI on Environmental Quality of China
( 17 ) Panel Data Analysis of the Impact of Economic Freedom as Well as Economic Conditions, The Quality of Life, and Public Education Spending on U.S. Undocumented Immigrant Settlement Patterns
( 18 ) The Role of Social Entrepreneurship in Pakistan and its Impact on Economy
( 19 ) Scenario Economic Impact Analysis of Offshore Fishing Tournaments in Ocean City
( 20 ) Impact of Telecommunications Market Liberalization on Labor Productivity in Economic Community of West African States
( 21 ) Impact of Participatory Decision Making on Organisational Goal Attainment
( 22 ) The Impact of Organisational Culture on Public Sector Performance: A Case Study of Local Authorities in Zimbabwe
( 23 ) An Empirical Assessment of the Impact of Access to Credit on Farm Output: A Case Study of Sefwi-Wiawso Municipality Ghana
( 24 ) An Investigation of the Impact of Organisational Structure on Organisational Performance
( 25 ) Impact of Exchange Rate Fluctuation on Selected Economic Sectors of the Nigerian Economy
( 26 ) Impact of Asymmetric Government Spending on Real Balances Demand
( 27 ) Investigating the Impact of Business Alignment on Job Gratification in an Organization: The Case of a University in Egypt
( 28 ) Impact of Network Finance Development on Inflation: Evidence from Chinese Market
( 29 ) The Impact of Military Spending on Economic Wellbeing in Nigeria
( 30 ) Testing the Random Walks in Korea Stock Exchange
( 31 ) The Effects of Exchange Rate Liberalization in Kenya on French Beans Exports
( 32 ) Exchange Rate Movements, Import And Economic Growth in Nigeria (1986-2010)
( 34 ) Testing the Random Walk: The Case of Hong Kong Stock Exchange
( 35 ) Role of Foreign Investment and External Debt in Determination of Exchange Rate
( 37 ) Studying the Integration of Damascus Securities Exchange with Selected Stock Markets
( 38 ) The Effect of Exchange Rate Changes on Consumer Prices in Nigeria: Evidence from VECM Model
( 39 ) Dynamics of Inflation, Economic Growth, Money Supply and Exchange Rate in India: Evidence from Multivariate Analysis
( 40 ) Implications of Crude Oil Price Volatility and Parallel Exchange Rate Fluctuation on the Cost of Living in Nigeria
( 41 ) Relevance of Stakeholders Theory, Organizational Identity Theory and Social Exchange Theory to Corporate Social Responsibility and Employees Performance in the Commercial Banks in Nigeria
( 42 ) The Effects of Exchange Rate Variability on Trade Flows in Nigeria: A Cointegration Analysis
( 43 ) The Profitability of Momentum Strategies: Empirical Evidence from Damascus Securities Exchange (DSE)
( 44 ) Exchange Rate and Foreign Reserves Interface: Empirical Evidence from Nigeria
( 46 ) The Colonialists & Indigenous Exchange Currency: Tracing the Genesis of Socioeconomic Woes in Postcolonial Nigeria
( 47 ) The Transitional Relationship between Economic Growth and Exchange Rate in Ghana: An Empirical Approach
( 48 ) Importance of Corporate Governance Quality and Voluntary Disclosures of Corporate Governance Information in Listed Malaysian Family Controlled Businesses
( 49 ) Strategic Evaluation of Distributed Power Generation Technology: A Sustainable Approach
( 53 ) Rate of Return Would Not Increase To the Extent of Annuity Saving Discount
( 54 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 55 ) A Model of Strategic Thinking: Islamic and Iranian Perspective
( 56 ) Promoting Local Acceptability of International Oil Companies (IOCS) Through Corporate Social Responsibility (CSR): The Case of Tullow Oil in Ghana
( 57 ) Challenges and Survival Strategies for Women in Small Scale Catering Business: A Case Study of Siyaso Magaba, Mbare
( 58 ) Attributes Influencing Strategic Alignment in the Service Sector: An Indonesian Banking Sector Case Study
( 60 ) The Role of Strategic Planning on the Management of Organizational Change
( 61 ) Development, Preference Change, and Inequality in an Integrated Walrasian-General-Equilibrium and Neoclassical-Growth Theory
( 62 ) Managerial Judgement Versus Financial Techniques in Strategic Investment Decisions: An Empirical Study on the Syrian Coastal Region Firms
( 63 ) Corporate Funding and Sustainability of Non- Governmental Organizations in Africa
( 67 ) Financial Deepening, Interest Rate Spread and Economic Growth: New Evidence from Sub-Sahara Africa
( 68 ) Implications of Accountants Unethical Behavior and Corporate Failures
( 70 ) Effects of Corporate Social Responsibility on Banks Financial Performance in Nigeria: A Study of United Bank of Africa
( 73 ) The Moderating Effect of Governance Mechanisms on the Relationship Between Innovation Strategy and the Performance
( 74 ) Public-Private Partnership as a Strategy for E-Governance Funding in Africa: The Gains and the Pains
( 75 ) Does Gold Price Lead or Lags Islamic Stock Market and Strategy Commodity Price? A Study from Malaysia
( 77 ) Profitability of Commercial Bank on Interest Rate Deregulation
( 79 ) Migration as a Livelihood Strategy: The Case of Internal Migration in Ghana
( 80 ) Correlation between Financial Difficulties and Financing Strategies among Market Stallholders in Batangas City
( 81 ) Africa's Human Capital Development: Is Public Finance Management an Effective Strategy?
( 83 ) Determinants of Corporate Tax Avoidance Strategies among Multinational Corporations in Malaysia
( 84 ) The Effect of Corporate Social Responsibility Disclosure on Corporate Financial Performance
( 87 ) The Effect of Selected Financial Ratios on Profitability: An Empirical Analysis of Listed Firms of Cement Sector in Saudi Arabia
( 89 ) Electronic Banking Innovations and Selected Banks Performance in Nigeria
( 91 ) The Effect of Selected Factors on Tax Revenue Mobilization in Ethiopia: The Case of Amhara Region
( 92 ) Consideration the Relationship Between Information Communications Technology and Economic Growth in Top 10 Economic
( 93 ) Shifting Global Economic Paradigm
( 94 ) How Telecommunication Development Aids Economic Growth: Evidence from Itu Ict Development Index (IDI) Top Five Countries for African Region
( 95 ) The Prospects of Accounting and Economic Systems in the Era of Global Knowledge Economy
( 96 ) Labor and Economic Growth in Zimbabwe
( 100 ) Long-Run Relationships and Causality Tests Between Military Expenditure and Economic Growth in India
( 101 ) Public Infrastructure Spending and Economic Growth in Nigeria: An Error Correction Mechanism (ECM) Approach
( 102 ) Study of the Relationship between Economic Growth and Inflation: Application to the Countries of the South Side of the Mediterranean: A Panel Data Approach
( 103 ) The Entrepreneurship, Knowledge Spillover and Economic Growth
( 104 ) Corruption’s and Democracy’s Effects on Economic Growth
( 105 ) Relationships between Financial Development and Economic Growth: A New Approach by Inputs
( 107 ) The Role of Information and Communication Technology in Rural Socio-Economic Development in Africa
( 108 ) Dividend Policy Relevancy in Theoretical and Practical Economics
( 109 ) Consideration the Effects of Water Sector Investment on Economic Growth in Iran
( 110 ) Is Brics a Viable Solution for Russia in the Context of the Present Eu’s Economic Sanctions?
( 111 ) Stock Market Performance and Economic Growth: Evidence from Nigeria Employing Vector Error Correction Model Framework
( 112 ) Rural Saving Mobilizations and Economic Development in Akamkpa Local Government Area of Cross River State - Nigeria
( 113 ) Nigerian Politics, Economic Development, and the Role of Human Rights Organisations on Elections
( 114 ) Rural - Urban Balance as a Measure of Socio-Economic Development with Special Reference to Iran
( 115 ) Causal Relationship between Imports and Economic Growth in Zimbabwe: An Empirical Analysis 1975 – 2013
( 116 ) The Effect of Access and Quality of Education on Economic Development in Botswana
( 119 ) Structural Breaks, Electricity Generation and Economic Growth in Nigeria
( 120 ) Comparative Analysis of the Effectiveness of Coub-Douglas, Real Business Cycle, and Keynsian Growth Models in Determining Economic Growth in Nigeria
( 121 ) The Link Between Agricultural Budgetary Allocation and Economic Growth in Nigeria