1

THE IMPACT OF NONOIL EXPORT ON ECONOMIC

GROWTH IN NIGERIA 1986-2010

BY

OFFIA NDIDIAMAKA P.
EC/2008/624

DEPARTMENT OF ECONOMICS

FACULTY OF MANAGEMENT AND SOCIAL SCIENCES

CARITAS UNIVERSITY, AMORJI-NIKE ENUGU

AUGUST, 2012
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TITLE PAGE

THE IMPACT OF NON-OIL EXPORT ON ECONOMIC

GROWTH IN NIGERIA (1986-2010)

BY

OFFIA NDIDIAMAKA P.
EC/2008/624

A RESEARCH PROJECT SUBMITTED IN PARTIAL

FULFILLEMENT FOR THE AWARD OF BACHELOR OF SCIENCE
(B.SC) DEGREE IN ECONOMICS

DEPARTMENT OF ECONOMICS
FACULTY OF MANAGEMENT AND SOCIAL SCIENCES
CARITAS UNIVERSITY, AMORJI-NIKE
ENUGU.

AUGUST, 2012
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APPROVAL PAGE

This is to certify that this research project was undertaken by Offia

Ndidiamaka P. and duly supervised and approved as having met the

requirement for the award of Bachelor of science (B.sc) degree in

Economic, from the department of Economic Faculty of Management

and Social Sciences Caritas University, Amorji-nike Enugu.

----------------------------------- Date:----------------------------
Prof. F.E. Onah
(Supervisor)

-------------------------------------- Date:---------------------------------
Mr. P.C Onwudinjo Esq
(HOD)

---------------------------------- Date:----------------------------
Dr. Umeh C.C
Dean of Faculty
Management and Social Science

-------------------------------------- Date:----------------------------
External Supervisor
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DEDICATION

I dedicate this work to Almighty God, for his protection and love

throughout my stay in caritas university. Also to my parents Elder/ Mrs.

Edison Offia for all their support throughout the pursuit of my academic

career.
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ACKNOWLEDGEMENT
I wish to tank God Almighty for his wisdom, protection, favour and
blessing throughout my stay in Caritas University.
I will also like to say a big thanks to my incomparable and treasured
parents, Elder & Elder Mrs. Edison Offia who made my dream come
true, also to my siblings Grace, Uche, and Emenike for their prayers and
to my Aunty Mrs. Rosemary Egede, my friend, HRH Ude Kenechukuwu.
I own you all a lot.
I also expressing my profound gratitude to my supervisor, Prof. F.E
Onah, whose advice, stimulating suggestions, support and time he
dedicated for my work my gratitude goes to my Dean, HOD and to my
lecturers, Mr. Uche E.O., Mr. Ojike R.O, Prof. Udabah S.E, Dr. Umedi,
Mr. Ikpe M.N, Odionye J.C, Osodiuru P.E and Mr. Odo A.C, I will never
forget you all.
Finally to my friends Efe & Cynthia, my roommates who in one way or
the other contributed to my work, I say may God in his kindness reward
all of you.
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TABLE OF CONTENTS

Title page i

Approval page ii

Dedication iii

Acknowledgment iv

Table of contents v

Abstract viii

CHAPTER ONE: INTRODUCTION

1.1 Background of the study 1

1.2 Statement of problem 10

1.3 Objectives of the study 11

1.4 Significance of the study 12

1.5 Scope and Limitations of the study 13

CHAPTER TWO: LITERATURE REVIEW

2.1 Theoretical literature 14

2.2 Empirical literature 19

CHAPTER THREE: RESEARCH METHODOLOGY 32

3.1 Model Specification 33

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3.2 Definition of variable 33

3.3 Assumptions of the error team (U) 35

3.4 Nature and scope of Data collection 35

3.5 Method of Data analysis 36

3.6 Testing of hypotheses 36

3.7 Evaluation of model 37

3.7.1 Evaluation based on economic apriori criteria 37

3.7.2 Evaluation based on statistical criteria 37

3.7.3 Evaluation based on econometric criteria 38

3.8 Sources of data and collection 39

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS OF

RESULT

4.1 Presentation of Result 40

4.1.1 Interpretation of result 41

4.2 Evaluation of result 42

4.2.1 Evaluation based on economic apriori criteria 42

4.2.2 Evaluation based on statistical criteria 43

4.2.2.1 R- Squared 43
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4.2.2.2 T- Test 43

4.2.2.3 F- Test 45

4.2.2.4 Standard error 46

4.2.3 Evaluation based on econometric criteria 47

4.2.3.1 Normality test 47

4.2.3.2 - Test for heteroscedasticity 49

4.2.3.3 – Test for autocorrelation 50

4.2.3.4 – Test for multicollinearity 51

4.3 Hypothesis testing 52

CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND

CONCLUSION

5.1 Summary 54

5.2 Recommendations 54

5.3 Conclusion 57

References 58

Appendix 1 60

Appendix II 61

Appendix III 62
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ABSTRACT

The essence of this work has been to determine the effect of non-oil
export on economic growth in Nigeria, during the period of 1986-2010.
In carrying out this study, secondary data were collected and empirical
analysis was made. To achieve these objectives, multiple regressions
were used in analyzing the data. The empirical results reveal that non-
oil export is statistically significant to Nigeria economic growth. On the
other hand, oil export also has been significant to Nigeria Economic
growth of the non-oil export while government expenditure (GEX) has
not been significant to Nigeria’s economic growth of the non-oil exports.
Following this, some recommendations which include encouraging
financial institutions, improving in data collection and banking, efficient
allocation and use of resources, government base investing in non-oil
sector in other to diversify the economy (from monoculture economy to
a multicultural economy) and creating economic environment which will
help boost the activity of non-oil export sector.
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CHAPTER ONE
INTRODUCTION

1.1 BACKGROUND OF THE STUDY

There is a number of reasons for a country to be concerned about its

rate of economic growth. Economic growth is desired by both affluent

and non-affluent economies. Economic growth is the desire for higher

levels or real per capital income, real output which must grow faster

than the production of the economy in question. Economists, policy-

makers, public and private sectors work ceaselessly towards attaining

economic growth by the use of development and growth models and

policies. Among the policies used are trade policy (Import and export

policies, monetary policy, exchange rate policy, fiscal policy, market

etc). In this study, the non-oil exports and economic development in

Nigeria will be examined.

Non-oil exports are the products, which are produced within the country

in the agricultural, mining and querying and industrial sectors that are

sent outside the country in order to generate revenue for the growth of
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the economy excluding oil products. These non-oil export products are

coal, cotton, timber, groundnut, cocoa, beans etc.

Today, as in the past, the growth of Nigerian economy remains partly

dependent upon increasing productivity of the agricultural sector.

Helleiner (2002:124) states that no matter how much development and

structural transformation achieved, it will remain its relative dominance

in the economy to many decades to come. Precisely, it is from

agricultural exploits that the economy has received its principal stimulus

to economic growth.

Agricultural sector can assist through the exportation of principal

primary commodities which will increase the nation's foreign earnings

and which can be used to finance a variety of development projects.

The growth of the agriculture sector can make a substantial contribution

to the total tax revenue, as well as having some implications for inter-

sectional terms of trade. Also in the area of capital formation, the

savings generated in this sector can be mobilized in development

purposes, while increase in rural income as a result of increasing

agricultural activities can further stimulate the product of the modem

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sector. The needs of the agricultural sector could indirectly influence the

creating of additional infrastructures which are indispensable to rapid

economic development. (Olaloku. 2001:13).

Another non-oil export to be dwelled on, is industrial sector. It is the

fastest growing sector in Nigeria economy. It comprises of many

manufacturing and mining. Nigeria has manufacturing base prior to

1960 and shortly after.

The problem was due to lack of modern technology skills, managerial

experience of complex organizations and financial back -up. The

problem was further aggravated by the colonialists' merchants

convincing arguments on the goodness of comparative cost advantage.

Nigerians were coaxed into concentrating their efforts in the production

of primary agricultural products and exporting them to the metrological

industries in Europe.

Our industrial sector took off after independent relied on satellite firms

representing British interest. The bank sector, which is constellation of

colonial banks branches and some companies that were able to invest

in manufacturing were the multi-national that have access to funds,

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technology and managerial expertise. This greatly hindered the

progress of indigenous entrepreneurs.

The Nigerian manufacturing sector has been described by Ikediala

(1983) as consisting of more assembling plants. He says that the

implication of this is that the industries have very little backward linkage

in the economy, since the bulk of the inputs is imported, thus the

manufacturing sector depends on imported raw-material the extent of

42%. The capacity utilization of manufacturing industry has always

been low in this country. The reasons as put by CBN (1998) are not

unconnected with raw materials scarcity, consumers resistance due to

high prices, increase in cost of manpower. Others mentioned are

equipment breakdown due to poor technology, lack of spare parts. Time

lags between, when inputs are ordered for and when they arrive, cash

flow problems in industries becomes a permanent features.

The Nigerian Civil war brought about the deterioration of the oil palm

grooves and plantation were abandoned and little if any new planting

was undertaken. As a result of that, the output of palm oil and palm

kernel declined drastically. But according to Onwuka (1985), the

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problems of palm products are due to the stagnation in the production

of this commodity, which is partly explained by the presence of wild

palm trees, which are of low-yield quality, and the difficulties

experienced in harvesting them. In addition, the old system of pricing

which guarantees low producer prices for palm produce discourage

substantial investment from being made for further production of this

product. Also, the problem marketing boards cannot be over looked.

Marketing board is an institution set up by the government with the

exclusive right to buy and sell certain agricultural products.

They purchase some products locally export sales are made through

the Nigerian marketing company, which is jointly owned by all state,

marketing. One of the functions of the marketing board is to stabilize the

prizes or our cash crops and hence creates stability of income for

farmers and to accumulate funds for development purposes. But the

operation has failed to provide incentives to farmers to increase their

input. Also, the producers paid unnecessary tax and they took from the

producers some money, which should have gone to them as income.

They thus reduced the amount of capital available to the producers.

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This criticism, according to Adenira (1999) made the Federal

Government to reform the Marketing Board System with a view to

increase producers' prices and income. He said that the essential

features of the new reform are the prices, which are now fixed by a

single authority while producer taxation (export duty and produce sale

tax) has been abolished. Another major innovation in the system is the

creation of commodity boards with responsibility of marketing specific

products whenever they are produced in the country. These boards are

likely to reduce administrative problems and be more economical

compared with all oil-produced state Marketing Boards previously in

existence.

The major fault of the successive government that are supposed to

sustain this sector through the building of macro-economic structures

and incentives diverted their attention away from agriculture. The result

was sharp in the export/import equation as country started importing

even palm oil that was hitherto imploring from Nigeria. The situation

was becoming worrisome thus by 1975 there were attempts to

recapture the lost of glory of agriculture. General Olusegun Obasanjo's

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operation feed the nations becomes the first real expressed official

attempt in this direction. It was followed by the establishment of two

River Basin Development Authorities in 1977. By 1978/1979, the federal

Government made budgetary provision to establish 4,000 hectares of

mechanized farms in each of the 19 states then, by 1979, there was a

re-launch of "operation feed the nation" with a new tag "Green

Revolution" with various committees set for its implementation (Oko,

1999).

If the efforts of the two leaders-General Olusegun Obasanjo and Alhaji

Shehu Shagari's regimes could have brought vigor to the agricultural

sector, the activities of the sic-commodity boards did not assist much..

Oko said that fixing export product prices without recourse to cost

inputs discourages agriculture therefore remained slow because food

demand was growing at the rate of 3.5% per in the 80's while

agricultural output was crawling at 11 %. Between 1990 and 1998 GDP

in agriculture declined to 6.2%. Then the distributions of agriculture

inputs to producers were neglected, infrastructure facilities like

motorable feeder roads, and irrigation facilities etc, made it difficult to

 17

increase agricultural production. CBN mandate to bank with regard to

bank loans to agriculture as priority sector for preferential leading was

floated.
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THE TABLE BELOW SHOWS YEARLY PALM PRODUCTS

PRODUCTION AND COCOA PRODUCTS PRODUCTION IN TONES,
WHICH COVER FROM 1990-2004.
Year Palm Products Cocoa Products

1990 730 1190

1991 760 1363

1992 792 1321

4191993 825 419

1995 837 503

1995 871 403

1996 920 591

1997 938 635

1998 992 683

1999 1003 721

2000 1411 832

2001 1603 925

2002 114 1160

2003 1701 1165

2004 1770 1200
Source: CBN Annual Report and Statement of Account 2004
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1.2 STATEMENT OF THE PROBLEM

Nigeria remained a net exporter of agricultural products between 1960

and 1970. Goods exported included palm oil, palm kernel, cotton,

groundnut, etc. agriculture through export of non-oil products has a rosy

record contribution up to 80% of the gross domestic product and

providing employment for over 70% of the working population. But

recently that has been a steady decline in terms of agricultural product,

to export and an abandonment of sector by a large percentage of the

work force.

But the story of its decline is as pathetic as its impact on industry that

relied heavily on the sector for raw material. Thus, the decline come

with surge of revenue from oil (oil export). But the discovery of crude oil

alone cannot be held responsible completely for the misfortunes or

decline of the agricultural sector. The policy instruments put in place by

successive government were more of lip service than concrete action.

The creation of Marketing Board contributes greatly to the decline of

non-oil export since the Board has the dole right to export the

commodities. It is also pertinent to say that fixing of export product

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prices by Marketing Board discourage further private investments in the

sector. Furthermore, the sector suffer from inadequate credit facilities,

they have no security to back-up their loan applications. Those who are

lucky to be given loans do not make proper use of them. Even

existence services were neglected, infrastructure facilities not provided,

CBN directives on agricultural loans floated.

1.3 OBJECTIVE OF THE STUDY

This research has a particular focus that aims at examining the causes

of growth in government revenue using non-oil revenue of the

government as an instrument. The non-oil revenue spanning the range

of products as agriculture and manufacturing. The major objectives are

broadly defined as follows:

(a) To evaluate Nigerian's past and present non-oil exports effect in the

promotion of economic growth.

(b) To evaluate government policies or measures towards boosting non-

oil sectors contribution to the economy.

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(c) To evaluate the factors responsible for the decline in the

contributions of non-oil revenue to the economy.

(d) To make recommendations on the ways of improving the non-oil

sector

1.4 SIGNIFICANCE OF THE STUDY

1.4.1 The study of the contributions of non-oil export to the growth of

Nigeria economy is significant and important, for this knowledge, it will

enable the policy makers to formulate appropriate policies that will aim

at improving on the quote of the total revenue brought about by the non-

oil sectors of the economy. This study is also important and significant

in that it will examine the various ways of improving non - oil outputs.

This study will also evaluate the contributions of non - oil sector towards

raising the living standard of Nigerians with in the period under review

(1984- 2003).

Since not so much works have been done on the contributions of non-

oil exports to Nigerian economic growth, this study will be of great

importance.
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1.5 SCOPES AND LIMITATIONS OF THE STUDY

This study is an attempt to evaluate and review agricultural products

and policies in the economy towards economic growth and

development in Nigeria. It intends to cover the periods between 1984

and 2003. It intends to evaluate the contributions of non-oil exports to

Nigerian economic growth and development.

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CHAPTER TWO

LITERATURE REVIEW

2.1 THEORETICAL LITERATURE

Non-oil export products are those commodities excluding crude oil

(petroleum products), which are sold in the international market for the

purpose of revenue generation. According to CBN publication (1998) on

the Nigerian export product guidelines oil export and non - oil export

had to be distinguished because of the great different in terms of

volume and value of export earning between the two oil export had

taking over the lead in the economy and had over the years contributed

greatly to the country's export products accounting for over 92% of total

volume of export and 86% of total volume of export and 86% of total

earnings (CBN 2001).

There had been serious concern over the dependency of oil export

earnings in the development of Nigeria economy. Following this

successive government had tried to embark on diversification of the

export base of the country thus; there had been efforts in the past and

present time, to increase the non-oil export of Nigeria both in volume

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and earnings (values). As Soludo (2002) noted that easiest way to

fastening over nation's economic recovering and development is to

broaden over export base of non-oil exports, which will to invigorate the

oiling sector of the economy and help place the economy on the

sustainable development path.

According to CBN publication (2001) non-oil export products can be

broadly classified into three major groups. These include:

(a) The Agricultural Commodities and Products.

(b) The Solid Mineral Export Products.

(c) The Craft and Manufactured Export Products.

2.1.1 THE AGRICULTURAL COMMODITIES AND PRODUCTS

EXPORT

This category of export products was once the major source of export

earnings to Nigeria and it was before and immediately after the nation's

independence period to the oil boom period of late 1960's and 70's. The

value and quality value of quality (volume) of agricultural commodity

and products exports in the northern region agric export products like
 25

groundnuts and cotton, in the west, we had cocoa and rubber in the mid

while in the eastern part we had palm oil and palm kernel products. In

recent time we had other exportable agricultural products and

commodities like cashew nut, sealer seed, bean seed, etc. The

Obasanjo administration in 2004 had declared the nation's readiness to

export cassava products worth over $4 billion (US dollar) to countries in

Europe and Asia within four years period. Thus there had been a quite

cassava production revolution in the country to meet this demand. More

government actions are needed in this direction to achieve this

objective. In effect, there had been a concerted effort by the

government to boost the agricultural exports of the country to enhance

our economic development.

2.1.2 THE MANUFACTURE AND CRAFT EXPORT PRODUCTS

This is another part of non-oil export. In the country, the contribution of

this category of export products is not encouraged in the years past.

According to Ikpeazu (2001) the problem of manufacturing sector are

numerous and these had cost the country to have its own fair share in
 26

the export of manufactured goods due to the quality and not meeting

international standard. In the observation made by MAN (Manufacturing

Association of Nigeria) in their 2002 general meeting, the government

can help to revamp the sector by increasing the capacity utilization via

infrastructure development programmes and financial assistance to the

sector.

There was a boost in the craft and manufactured export product

following the launching of the African growth and opportunity act

(AGROA) by the United States government in 2001, which allowed for

increased export of African goods and commodity to us market in

(2004) it was reported by the ministry of commerce that Nigeria exports

to us under the (AGROA) programme increased greatly amounting to

over & 3.2 dollars Ministry of Commerce Publication (2004). More

efforts should be regarded towards this direction to help widen Nigeria

export share in the world market thus help to build a solid and sound

economy.
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2.1.3 THE SOLID MINERAL EXPORT PRODUCT

This is the last category of the non-oil export as discussed by the CBN.

It contributed significantly to the export earnings of the country before

the advent of oil. Solid mineral like coal, tin ore, columbines, limestone

etc, were once the pride of the nation or the part and region where they

were mined like coal for Enugu, tin ore for Jos, limestone for Nkalagu

etc. their dwelling fortune could be attributed to the high dependences

of oil and the neglect of these sector.

The quality of coal and tin had declined greatly over the years. But

according to Mrs. Ezekwesiri the Former Minister of Solid Minerals

during her acceptance speech in Abuja recently said that the solid

mineral hold the key to Nigeria future as if well harnessed the revenue

from the sector can conveniently surpasses that of the products its

derivatives in the near future, coal for example, Poland and export

market in mail, Britain, Poland and other European countries as these

had indicates their interesting import of the Nigerian coal which had be

adjudged the best in the world as it was surplus free.

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2.2 EMPIRICAL LITERATURE

Many writers in Nigeria's export have chosen the stance of relating the

behavior of the country's exports to change within the importing

countries.

Therefore, they tend to see national income as one of the major

determinants of the country's imports from Nigeria. One of such works

undertaken by Olayide (1980) covered the pricing of Nigeria's export

commodities. He observed that Nigeria export prices are volatile and

adopted on econometric approach to empirically obtain the coefficient of

f flexibility for prices of numbers of Nigeria.

Agricultural Commodities. Olayide specified his model with which he

found only the quantities of palm oil, groundnut and cocoa exported to

be statistically significant. The major shortcoming of Olayide's work is

that since he sells out to find the degree to which Nigeria export

quantities reacted to changes in export to changes in the income of the

importing countries.

In 2001, Olayide and Dupe Olatundosun working together conducted

another study on the demand for Nigeria's exports for the period 2000-
 29

2001. They included that only groundnuts, groundnut oil, palm oil, palm

kernel, and cotton in their investigation. Their interest lied mostly in

determine the elasticity of demand for the mentioned non-oil export

products and the other factors responsible for fluctuations in the

demand for those products. They included changes in income of the

importing countries in their model. But again, their work was rendered

rather defective by the inclusion of a variable for a measure of export

bases. This is because in their result the measure of export control

showed a positive sign, which means that higher the export of these

products. This dedication could not have been plausible.

Another defect of the Olayide-Olatundosun's work is that total Nigeria

Cocoa export was regressed on the means of real income of only four

importers. This formulation wrongly presumes that the demand of the

four countries whose real income was used constitutes the total

demand for Nigeria's exports. It would have been more logical to

estimate the individual function in each country. They forget to

acknowledge the fact that the conditions that influence the demand for

Nigerian Cocoa, for instance, many vary from one country to the other.
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Oni (1986) conducted a research in Nigeria's palm oil export. His main

point of deviation from other peoples work is that instead of

aggregating, he took a separate study of the quantities each of the

major trading partners. This new approach will finish information on the

demand conditions that might exist in each of the countries importing

Nigeria palm oil.

In another work conducted by J. Mars, he discovered that the most

important problem encountered when considering ways to bring about

the full utilization of Nigeria resources is concerned with export industry.

This is because, according to him about one third of the total Nigeria

output is for export; the export industry is the core of the money

exchange economy of Nigeria, so that Nigeria is sensitive to conditions

in the export industry. Mars noticed that by the very nature of Nigeria's

exports, she cannot effectively influence the foreign markets, but only

can bring about improvement only within the limit sets by conditions of

world supply and world demand for the type of goods exported by

Nigeria or competing with them. This is because there are many other

countries that produce similar products.

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Bases on this observation therefore, it means that government cannot

adequately improve conditions since it cannot effectively influence

foreign demand. At the best, it would only redistribute and various other

devices,, but not to influence it by manipulating foreign demand.

Therefore, the problem of preventing fluctuation of world demand and

supply of exports is an international problem, which only many nations

acting in concert could undertake to solve.

As a guide on how to reduce fluctuation, in supply and demand on

export mars sub-divided Nigerian export products into five groups

according to the income and price elasticity of demand and supply. He

suggested that there should be no two groups for which income and

price elasticity of demand is above unity. These groups included among

other commodity palm oil, palm kernels and cotton seed. The other sub-

division in which he included such commodities as Sheepskins, Sheer

nuts, Groundnut and Benny seed should be subjected to an

international quota scheme because the demand for them is income

inelastic.
 32

Akinole (2001) in his study investigated the prospects for Nigerian

petroleum, groundnut, Cocoa and Palm oil in the expanded economic

commodity. He discovered that the demand for Nigeria oil by the

common market countries is price elastic. But the membership of

Nigeria in the organization of petroleum exporting countries, a collective

bargaining organization makes the exploitation of the high price

elasticity of demand unlikely. He said that there exists an effective

competition between Nigeria's groundnut and Soya bean in the

following common market countries France, Netherlands, Belgium,

Luxemburg and United Kingdom. He said that Nigeria groundnut is

inferior goods in these countries. But remarkably, groundnut oil and

cake are not inferior goods in these markets. He observed that this

might be due to the fact that the quantities of these products imported

from Nigeria are very small proportions of total quantities observed. As

a result, Nigeria should shift from the export of groundnuts to groundnut

oil and cake and this should be boasted by an effective export

promotion in market currently exploited and/or the search for new

market. He also concluded that the demand for Nigeria Cocoa is price
 33

inelastic in Britain but elastic in many other R.E.C countries. He said

that the Britain lack response to changes in the Nigeria price of cocoa is

a price of valuable information to our policy makers who have long been

concerned with the effect of Britain's entry into the common market on

Nigeria's cocoa export, therefore the higher tariff of 4% which Nigeria

cocoa export to Britain now faces should not be expected to have any

serious repercussions on Nigeria's cocoa export to Britain.

He summarized by saying that the prospects Nigeria's petroleum export

to the EEC is bright. However, it should be expected that recession or

low rate of real growth in the EEC would seriously diminish Nigeria's

foreign exchange earnings derived from oil. Since he observed that

groundnuts become inferior goods at higher levels of per capital real

income, he concluded that the role played in export earnings by

groundnuts would diminish significantly over the years. As for groundnut

products the relative increase in their export earnings will depend

largely on the effectiveness of export promotion shames. He also

concluded that future increase in the foreign exchange earnings of

cocoa would depend heavily in the growth in per capital real income in
 34

the less important cocoa consuming countries of EEC since the income

elasticity for cocoa are much higher there.

According to Ojo (1999:13), the major problems constraining the

development and growth of non-oil exports in Nigeria include the

following: low level of production; there are low levels of production in

both the agricultural and industrial sectors, this is attributable mainly to

high cost of production which limited the capacity of producer to procure

their needed inputs. Cost of production has been pushed up by high

interest and exchange rates as well as the poor state of basic

infrastructure. The major implications of low level of production are as

domestic outputs are not enough to satisfy local consumption, there is

hardly an exportation surplus for most goods, also the high cost of

production which results in high product prices makes locally produced

goods uncompetitive in the world market.

Secondly, inadequate knowledge of exports processes, procedures and

incentives. Exports require accurate and timely information on markets,

prices and quality standards and exports procedures. Also, exporters

are not provided with incentive such as quality inspection and

 35

certification, movement of export goods and clearing of imported goods,

among other. All these frustrate a lot of exporters out of business

because of their implication of production that is high cost of output

owing to time cost money wanted.

Thirdly, poor state of disrepair, of infrastructure initiate against the

effective manufacturing of products to services export trade and

resulting in outright delays or spoilage. The state of power supply and

telecommunication facilities among others things is inadequate for the

dynamic requirement of foreign trade and these hampers the growth of

the non-oil exports in Nigeria.

Ojo, also suggested solutions to the problem. He said that there is need

to promote expanded production in both the agricultural industrial

sector. He said that a higher level of output will help to achieve satisfy

local demand for goods, leave a reasonable balance for exports and

reduce the unit cost of production. That export products should be

diversified and promoting of foreign private investment also upgrading

of basic infrastructure.
 36

Research has done much work on the role of agricultural production

and export trade on the Nigerian economy.

Onwusi (2000), the availability of an adequate food supply is vital

because food storage leads to high prices, which in turn, lead to

demand for higher wages. He argue that this could have adverse effect

on the level of investment and therefore on the rate of economic growth.

In addition, he says that inadequate local commodity supply means that

massive importation will take place, which could also be a drag on

economic growth, as the nation's foreign exchange will be raised for

buying capital equipment, which is necessary for the development

programmed. Persistent importation of palm product and other

agricultural products cannot fail to have adverse effects on the local

production because of the belief that since agricultural products ate

imported no pressing need to expand local production.

Helleiner (2002:192), shows that only a small part of total agricultural

output of the developing countries receives elaborates local processing;

since the bulk is usually sent abroad. He points

 37

out that agriculture normally performs better in the supply of

intermediate inputs to other sector than in the use of others

intermediate inputs.

Ifeanyi (2002:42), said that government derives revenue through

various indirect taxes imposed on agricultural products and used to

provide both economic and social infrastructure to the people through

tax holdings or concession are allowed from those engaged in the

exportation of agricultural products such as cassava now. She

maintains that this policy is designed as an export promotion strategy

pursued by the government. Also derives revenue from the sales of

some locally distributed goods. Ifeanyi also pointed out that export

trading also helps to improve the balance of payment/trade position in

favour of the country of origin, as well as stimulate local production and

processing. It allows for the exploitation of the principles of comparative

advantage and economics of scale in production. According to Olaloku

(2001:14), the problem confronting palm produce one shortage of

qualified manpower, inadequate supply of palm product inputs,

inadequate extension services and the poor condition of feeder roads

 38

and other transport facilities. He also includes lack of effective

supporting services such as farm credit, marketing facilities, and the

problem of land ownership impose any land tenure system in most part

of the country.

In addition, Ekpete (2001:48), remarks that the most pressing problem

facing palm product in Nigeria today is that of evolving a feasible level

of agricultural mechanization. He goes further and said that

mechanization of the projects and programmes comprise irrigation

schemes, mechanical system of cultivation,

private of technical and specialist agricultural extension staff and

supplies of input such as fertilizers. He believes that cultivation of plant

kike cocoa, palm tree, etc. Cut across the ecological zones and their

cultivation operations are analogous in many ways ad they requires;

seedbed preparation/land clearing planting operations weeding,

harvesting and post-harvesting operations that is handling, storage and

processing.

Ozochi (2000:63), includes poverty and illiteracy as some of the

problems controlling agriculture in Nigeria. He posits that most people in

 39

Nigeria live below that poverty line and therefore engulfed in the vicious

circle of poverty. He maintains that the people have limited or lower

incomes; lower income encourages

Lower investment and eventually eliminate in low productivity similarity,

he says that most Nigerians are illiterates, and about 80 percent of

them live in rural areas and they engage in subsistence agriculture.

Because they are mostly illiterates, they find it difficult to keep abreast

with changes in the modem practice of agriculture.

According to Oduala (1999:43), the reasons for relatives decline of palm

produce on the nations export list one firstly, the remarkable growth of

petroleum has changed the composition of the nations export.

Secondly, the production of palm produce has not expanded to desired

level due to the relative neglect of pal produce. Furthermore, an

expanding home demand for this commodity has also meant that less is

available for export. For example, home demand now accounts for the

entire production of palm oil.

Now, government policy and strategies for promoting production of

palm product and other agricultural palm produce and agricultural

 40

product to be enhanced in Nigeria certain conditions must be fulfilled

and strategy adopted. A programme of technical change and innovation

must be introduced, and the government must play a leading role in

this. It must be necessary to create supportive social institutions.

 41

CHAPTER THREE

RESEARCH METHODOLOGY

This chapter is concern with the presentation of research methodology

employed in the study that is the acquisition of relevant data and

analyzing the same, using appropriate statistical tools.

Modem modeling strategies are data centered as they allow data play

strategic roles in the analysis of observation. This is in content with the

view of the traditional modeling practices, which sees specification of

model as an exclusive domain of theory. Modem modeling approach

however, includes the specification searches guided by theory as an

integral part of data analysis. Data are therefore allowed to play an

active role in determining among rival specifications the best.

In this research work, the Explanatory Data Analysis (EDA) which is

one of the modem modeling approaches will be employed. The EDA

emphasizes mainly on learning from data as to arrive at an explanation.

The reason being that data by themselves are useless without an

interpretation.
 42

3.1 Model Specification

Now, it is obvious that non-oil export is not the only independent

variable that Gross Domestic Product (GDP) in Nigeria. As such, other

variables do affect GDP.

Specification of model involves the variables which will be included in

the model; the appropriate expectations about the sign and size of the

parameter of the function, and (he mathematical forms of the model.

There are several economic models that can be used to dive the

estimators of the parameters of economic relationships. In this study, a

two-way multiple regression model is used to analysis and establish the

relationship variable. The two-way multiple regression techniques is

used because I gives he best fit, and is an unbiased estimator. 3.2

Definition of Variable

In the Nigerian economy, economy growth (GDP) is associated with

Various micro-economic variables.

Among these variables included are:

GDP: Gross Domestic Product at current market prices.

 43

Non-oil: Non-oil exports revenue.

Oil: Oil Export Revenue

GEX: Government expenditure

The functional form of this model is as thus:

GDP = f (NON-OIL, OIL, GEX) the learner

functional forms are as thus:

GDP = b0 + b1 NON-OIL, + b2 OIL+ b3 GEX + U

Where t= 1984-2003

Bo = Intercept Term

B1-3 = Regression Co-efficient

U = The error or disturbance term.

3.3 Assumptions of the Error Term (U)

According to Kousoyiannis (2003), the following are the

assumptions of the error term (U):

(a) U is a random real variable

 44

(b) The mean of U is zero at any particular time.

(c) Homoscedasicity or constant variable of U.

(d) The variable U has a normal distribution

(e) The explanatory variables are measure without error.

(f) U is independent of the explanatory variables

(g) Non-autocorrelation of U.

(h) The model is correctly specified.

(i) The model is correctly identified.

(j) The macroeconomic variables are correctly specified.

Based on these assumptions, we build our model.

3.4 Nature and Scope of Data Collection

The study makes use of secondary data sourced from institutions like

the Central Bank of Nigeria (Annual reports and statistical bulletin).

Others include Caritas University Library, Federal Office of Statistics

(FOS). The study covers the period, from 1986- 2000

 45

3.5 Method of Data Analysis

The study makes use of ordinary least square (OLS) method of data

analysis. We adopt the ordinary least square criterion because the

alternative criteria or econometric techniques like the two-stage least

square (2 SLS), full information maximum likelihood (FLML) among

others, are more sensitive to specification errors of autocorrelation and

regression than the OLS. The ordinary least square (OLS) estimator

possesses the Blue (Best linear Unbiased Estimate) properties, which

include, efficiency, consistency

and unbiasness. The P.C. give 8.0 Computer software was applied for

the analysis of data.

3.6 Testing of Hypotheses

The above hypotheses will be tested at 5 percent or 0.05 level of

significance. The null hypothesis is acceptable if the probability at which

the t-value is significant is greater than the chosen level of significance.

Otherwise, the alternative hypothesis will be accepted, for the entire

variable included.
 46

3.7 Evaluation of Model

3.7.1 Evaluation based on Economic Apriori Criteria

This test is carried out to check if the signs and magnitudes of the

estimated parameters conform to what economic theory postulates.

3.7.2 Evaluation based on statistical criteria

The coefficient of determination (R2)

Thus R2 explains the total variation in the dependent variable (GDP)

caused by variations in the explanatory variable included in the model.

The F- Test

This test is used to test whether the variables included on the

work are significant or not in determining the level of domestic saving in

Nigeria. Each element of s follows the distribution with N-K degree of

freedom.

The T- Test

This tests the overall significance of the regression model.

 47

3.7.3 Evaluation based on Econometric criteria

Test for Auto correlation

This is to test whether the errors corresponding to different

observations are uncorrelated. The test will adopt the Durbin-Watson

statistic because of the presence of the lagged dependent variables as

are of the regressors, which indicates that the model is an

autoregressive model (Gujarati, 2004).

Test for normality

This test will be carried out to test whether the error term follows the

normal distribution. The normality test would adopt the Jarque –Bera

(JB) test of normality. The JB test of normality is an asymptotic, or

large-sample, test. It will also base on the OLS residuals.

Test for heteroscedasticity

This test would be conducted to ascertain whether the error U, in the

regression model have a common or constant variance. The white

heteroscedesticity test (with no cross term) will be adopted.

 48

3.8 sources of Data and Collection

Data used for the study are mainly secondary data sourced from

institutions like the central bank of Nigeria (Annual reports and

statistical bulletin). Others include caritas university library, Federal

office of statistics (FOS). These data are gathered for period of 25 years

(1986-2010). Hence, the reliability of the estimates depends on how

accurate the data gathered through these sources are; variables used

for regression (1986-2010) the data used in testing our hypothesis in

this chapter is secondary. The findings are presented and analyzed.

 49

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF RESULT

4.1 PRESENTATION OF RESULT

We specified a model in chapter three to capture the impact of

non-oil exports, oil exports and government spending on the economic

growth of Nigeria. In the empirical analysis of the effect of these

variable on GDP of Nigeria, the ordering least square (OLS) regression

techniques was used. We adopt this method because of its unique

estimating properties of unbiaseness, efficiency, consistency and

minimum or least variance.

Presentation Of Result

Table 4.1

Variable Coefficient Std. Error T- T-Prob R2

value
C 1-0702et005 2.2736et005 0.471 0.6427 0.0104
Non-oil 22.820 6.4128 3.558 0.0019 0.3762
Oil 1.5242 0.17188 8.868 0.0000 0.7892
GEX 1.3712 0.87242 1.572 0.1310 0.1052
R2 = 0.994426, F = (3,21) = 1248.9 (0.0000), BW = 2.72
 50

Result Interpretation

The interpretation of the above result in terms of coefficient is given as

follows;

The intercept is 0.994426. This shows that if all the explanatory

variables are held constant, GDP will be 0.994426.

The coefficient of non-oil export (Non-oil) is 22.820. This shows that

non-oil export is positively related to GDP and that a unit increase in

non-oil export will increase GDP by 23% approximately. The coefficient

of oil export is 1.5242. this also shows that oil export (oil) is positively

related to GDP and that a unit increase in oil export will increase GDP

by 15% approximately. For government expenditure (GEX), the

coefficient is 1.3712. This shows that government expenditure is

positively related to GDP and that a unit increases in GEX will increase

GDP by 14% approximately.

 51

4.2 EVALUATION OF RESULT

4.2.1 EVALUATION BASED ECONOMIC APRIORI CRITERIA

Our parameter estimates are expected to conform to apriori

expectation as it was discussed in chapter three. The table below

shows the outcome of our model parameter on apriori ground.

Table 4.2

EVALUATION BASED ON ECONOMIC APRIORI CRITERIA

Variable Expected sign Obtained sign Conclusion

Non-oil Positive (+) Positive (+) Conforms

Oil Positive (+) Positive (+) Conforms

GEX Positive (+) Positive (+) Conforms

The apriori expectation for the explanatory variables were satisfied

showing that all the variables conforms with economic acceptability of

the estimates.
 52

4.2.2 EVALUATION BASED ON STATISTICAL CRITERIA

These test are determined by statistical theory and aims at

evaluating the statistical reliability of the estimates and parameters of

the model from sample observation, the first order test is carried out

based on the following: R2, t- prob and F-test.

4.2.2.1 COEFFICIENT OF DETERMINATION (R2)

In our model, R2 = 0.994426, which implies that approximately

99% of the variation in the dependent variable (GDP) is explained by

the variations in the explanatory variables.

Judging by the size of the coefficient of determination (R2), 99%

shows a good fit for the model. Meaning that 99% variation is explained

in the model leaving around 1.02 variation in the model unexplained.

4.2.2.2 STUDENT T-TEST

a student T-test is used to determine the significance of the individual

parameters estimates. In doing this, we compare the calculated T value

in the regression results with the T- tabulated at n-k degree of the

freedom (df) and at 5% level of significant.

 53

The test will be carried out under the following:

H0: = O (the parameters are statistically insignificant)

H1: ≠ O (the parameters are statistically significant)

= Coefficient of the parameter

Ho: null hypothesis

H1: Alternative hypothesis

Decision Rule

Reject H0 if T-cal > T- tab or accept H0 is otherwise

n= 25, k = 4

Therefore, n-k = 25-4 = 21 at 5% level of significant

Table 4.3

Variable T –cal T - tab Decision Conclusion

C 0.471 + 3.182 T – cal < T- tab Significant

Non-oil 3.558 + 3.182 T – cal > T- tab Significant

Oil 8.868 + 3. 182 T- cal > T- tab Significant

GEX 1.572 + 3.182 T – cal < T- tab Not significant

 54

The interpretation of the result of the T-test carried out shows that non-

oil and oil are statistical significant, while GEX is statistically

insignificant.

4.2.2.3 F-TEST

This evaluation carried out is to determine if the independent

variables in the model are simultaneously significant or not. If F is

greater than the critical F at 0.05 level of significant, then reject the null

hypothesis, H0 & accept the alternative hypothesis H1.

H0: =O

H1: ≠ O

H0: shows that the model is not significant

H1: shows that the model is significant

Decision Rule

From the decision rule, we accept the null hypothesis H0 and reject the

alternative hypothesis H1: reject H0 if F- cal is greater than the F- tab.

For the numerators, the degree of freedom is k-1 that is 4-1 =3, for the

denominator, the degree of freedom is n-k that is 24-4 = 21 at the 5%

level of significant.
 55

Table 4.4

F –cal F – tab Decision

1248.9 3.07 Significant

From the result, it is observed that F-cal is greater than F-tab that is

1248.9 > 3.07, thus we accept the null hypothesis.

4.2.2.4 Standard Error

The null hypothesis for test is

H0: = O against alternative

H1: ≠ O

If the standard error is smaller than half of the numerical value of the

parameter estimates that is (bi) < bi/2, we conclude that this estimates

is statistically, significant. We therefore reject the null hypothesis that is

 56

bi = 0 and accept the alternative that bi ≠ 0 vice versa. This conclusion

of sign of b is based on a two-tier test as 5% level of significant.

Summary of Error Test

Variable Std error Coefficient Decision Conclusion

(½)

C 2.2736et005 3.5702 s(bi) < bi/2 Significant

Non-oil 6.4128 11.41 s(bi) < bi/2 Significant

Oil 0.17188 0.7621 s(bi) < bi/2 Significant

GEX 0.87242 0.6856 s(bi) > bi/2 Not significant

4.2.3 EVALUATION BASED ON ECONOMETRIC CRITERIA

4.2.3.1 RESIDUAL NORMALITY

The test is conducted to ascertain if the error term follows a normal

distribution. It follows a chi-square (x2) test with two degree of freedom

(second). The hypothesis is stated as:

H0: µ1 = 0 normally distributed

H1: µ1≠ 0 not normally distributed

 57

Decision Rule

Reject H0 if x2 > cal x tab 2(0.05)

at 2 degree of freedom and accept H0 if

otherwise.

Test statistics

JB = n (s2+ (k-3)2)
6 24

Where n = sample size

S = skewness coefficient

K=Kurtosis coefficient

For a normally distributed residual, the value of s & k are 0 & 3. Since

the JB computed is expected to be zero with a 2 degree of freedom, if

the value is close to zero/ the P- value reasonably high the residuals

are normally distributed. From the result obtained from Jarque – Bera

(JB) test of normality, JB = 9.0827 which is shown in appendix, and

from chi-square table X2 tab.

 58

Therefore, since X2 cal = 9.0827 < 32.671 at 5% level of significant and

for this reason, we accept H0& conclude that the error follows a normal

distribution.

4.2.3.2 TEST FOR HETREROSEDASTICTY

This test asymptotically follows a chi-square distribution with

degree of freedom equals to the number of regressors (excluding the

constant term) the auxiliary model can be stated this:

µt = 0 + 1 non –oil + 2 oil + 3 GEX + 4 non-oil2+ 5 oil2 + 0 GEX2 +µ1

Where vi = pure white noise error

This model is non and auxiliary R2 from it is obtained. The hypothesis to

be tested is H0: 1 = 2 = 3 -------- n = 0 (Homosedacity)

H1: 1 ≠ 2≠ 3 ----- n ≠ 0 (Hetrosedacity)

Note: the sample size (n) multiply by the R2 obtained from the auxiliary

regression asymptotically follows the chi-square distribution with

degrees of freedom equal to the number of regression (excluding the

constant term) in the auxiliary regression. Using Pc – given software

package saves the above rigors by calculating the chi-square.

 59

Decision Rule

Reject H0 if X2 cal x2 tab at 5% level of significance, if otherwise, accept

Ho from the obtained results, calculated x2 =12.917 while tabulated x2

0.05(8) 15.507. we accept the alternative hypothesis of homosedacity

and conclude that error term does not have a constant variables.

4.2.3.3 Test for Autocorrelation

One of the assumptions of OLS regression model is that errors are

independent. In the context of time series analysis, this means that an

error µt.

The Durbin Watson the test compares the empirical d value calculated

from the regression residuals, with dL and du in the table with their

transform (4-dL) and (4- du).

Decision Rule:

1. If d* < dL, we reject the null hypothesis of no autocorrelation

and accept that there is positive autocorrelation of first order.

 60

2. If d* > (4-dL), we reject the null hypothesis and accept that

there is negative autocorrelation of first order.

3. If du < d* < (4-du) we accept the null hypothesis of no

autocorrelation.

4. If dL < d*< du or if (4-du) < d* < (4-dL), test is inconclusive from

our regression result, the d* = 2.72

dL = 0.927

du = 1.812

4-dL = 3.073

4- du = 2.188

Hence: du < d* < 4 –du, we accept the null hypothesis and conclude

that there is no auto correlation in the model.

4.2.3.4 TEST FOR MULTICOLLINEARITY

This test was carried out using correlation matrix. According to

Barry Feldman (1985), criteria multicollinearity is not a problem if no

correlation exceeds 0.08.

 61

Table

GDP NON-OIL OIL GEX

GDP 1.000 -

Non-oil 0.9692 1.000 M

Oil 0.9890 0.9351 1.000 MM

GEX 0.9860 0.9747 0.9682 1.000 MMM

Where M shows, signifies, the presence of multicollinearity. The

pressure of multicollinearity exist in all variables.

4.3 Evaluation of Research Hypothesis

H0: b1 = 0, there is no significant relationship between non-oil export

and Nigeria (GDP).

H1: b2 =0, there is a significant relationship between non-oil export and

Nigeria (GDP)

From the regression result, we observed that the coefficient of

non-oil export is positive implying a positive relationship with GDP.

However, T-test showed that the impact of non-oil export and oil export
 62

are significant, while GEX is insignificant. Even though the entire

regression is significant as seen from the F-test and the second order

test, there is no basis for rejecting Ho.

We therefore accept Ho and conclude that non-oil export has been

significant in Nigeria’s economic growth process.

 63

CHAPTER FIVE

SUMMARY, RECOMMENDATIONS AND CONCLUSION

5.1 Summary

The essence of this project work has been to determine the effect of

non-oil exports on economic growth in Nigeria between the periods

(1986 – 2010). Bearing in mind that non-oil export alone is not the only

determinant of economic growth; other variables were added, based on

our methodology, as was independent variables. After the analysis, it

was discovered that non-oil exports revenue, oil export revenue are

significant and government expenditure is not significant. Based on the

empirical findings, recommendations are made on how best to improve

the contributions of non-oil export to the Nigerian gross domestic

product (GDP). In the final analysis, a conclusion is drawn based on the

various findings.

5.2 Policy Recommendations

In order to improve on the contribution of non-oil exports to Nigerian

GDP, the following recommendations were made.

 64

1. Encouragement of Export Promotion

The government should endeavour to support various export promotion

programmes and institutions. This could be achieved by encouraging

financial institutions, both formal and informal, to make loans available

at reduced rates of interest for investors as to increase the level of

investment in this country.

2. Diversification of the Export Base

There should be a quick diversion from monoculture economy to a

multicultural one. This is so. Since the oil which Nigeria depends on is

prone to shocks beyond the control of the country.

As such, crude oil revenue should be put so as to make Nigeria

economy self-sustaining.

3. Reduction or Removal of Imports Tariffs

Tariffs paid on imports of equipment necessary to boost non-oil

production in Nigeria are, so high that productions are averse to risk

their resources so; there should be. a down ward review of [lie tariff/tax

structures to reduce the cost. of production in Nigeria.

 65

4. Efficient Resource Allocation and Use

The resources at the disposal of the government should be

efficiently allocated and utilized if Nigeria is non-oil exports are to

improve.

5. Proper Policy Implementation

Over the years, a policy has been made without their full

implementation. So, to review the economy, proper policies must be.

squarely implemented as to promote non-oil exports.

6. Improvement in Data
Collection and Banking Data in modern world play vital roles in

planning; the government or policy makers should make provision for a

systematic collection of data and their banking, by equipping the '

relevant ministries and parastatals with computers and other ICT

gadgets that will improve the collection and accessorily of these data by

researchers.

7. Political Stability

The political condition of this country has to remain stable as to

attract both foreign and local investments in

 66

Nigeria. This is because; no investor will be willing to invest in an

atmosphere of politically instability, where policy changes rapidly.

5.3 Conclusion

The contributions of non-oil exports to the Nigerian economic growth

over the years (1986-2010) has been declining dative to its level in the

1960s. Most policies and programs of government towards improving

the non-oil sector of the economy either failed completely or partly in

achieving its goals.

From the result of our study, we therefore concluded that non-oil

exports adds positively on the Gross Domestic Product of Nigeria, and

as such, effort's should be made to increase the tempo of economic

activities in the non oil sectors of the economy. We therefore hope that

the results of our findings will be a source of consultations for policy

makers and other related bodies in a bid to achieve economic growth in

Nigeria.
 67

BIBLIOGRAPHY

Akinole (2001) The Role of Government in Promoting Agricultural

Production and Export Trade in Nigeria. Ibadan: Yinela Bola
Publishing Company.

Add lira, A. A (1999) The Agricultural Sector in Nigeria:

Problem and Prospects. Lagos: Ibabaki Publishers. CBN (1998)
"Export Guidelines" CBN Publication Vol.5 No. 4, June 1998,
Abuja.

CBN (2001) "Annual Statement of Account" December 2001.

Ekpete (2001) "Agricultural Sectors: Problems and Prospects."
The Guardian, November 10.

Hell.siner, G. K (2002). Peasant Agricultural Government and

Economic Growtli in Nigeria: Ibadan; Homewood, Publishers.

Ikpeazu, C. (2000).' "Tackling the Problems of Manufactory Sector of

the Nigeria Economy/' Article of the Nigerian Industry Policy.

Ifeanyi, N. B. (2002). Leading Issues in economic Development.

Lagos: ACENA Publishers.

Olayide, S. (2001). Some Estimate of Supply and Demand Elasticity

Selected Commodities in Nigerian Foreign Trade: Journal of
Business and Social Studies, Lagos: Vol. 1.

Koutesoyiannis, A. (1987). Theory of Econometrics.

London: Macmillan Press Ltd.
 68

Ozochi, 0. (2000) Economic: A Simplified Approach. Enugu:

Fabsa Graphic Production.

Olaloku, F. A (2001). Structure of the Nigerian Economy. Lagos:

University of Ibadan Press.

Onwusi, L. W. (1999). "Nigerian Economy and Prospects of Non-oil

Exports Lecture at Savannah Bank," Onitsha May 10.

Ojo, M. 0. (1999). "A Review and Appraised of Monetary and other

Sectors Policy Measures in Federal Government Budget for
1999" CBN Bulletin Vol. 23, N0.1
Oko, A. 0. (1999). "Agricultural Sector: The Impact if Increasing
Productivity in Non-oil Products" The Guardian. March 20.

Soludo, C. (2002). "Repositioning Nigeria for Regional Economic

Power: A. Paper Presented by the C B N Governor at the seminar
Organized by Nigeria. Export Position Council." August 4 2002
Lagos.
 69

APPENDIX I

DATA PRESENTATION

YEAR GDP NON-OIL OIL GEX

1986 69146.99 552.1 8368.4 16223.7
1987 105222.84 2152 28208.6 22018.7
1988 139085.3 2757.4 28435.4 27749.5
1989 216797.54 2954.4 55016.8 41028.3
1990 267549.99 3259.6 106626.5 60268.2
1991 312139.74 4677.2 116856.5 66584.4
1992 532613.83 4228.3 201384.8 92797.4
1993 683869.79 5022.3 213778.8 191228.9
1994 899863.22 5349 200710.2 160893.2
1995 1933211.55 20102.8 525669.6 248768.1
1996 2702719.13 20059.5 1108187.1 337417.6
1997 2801972.58 25629.3 1065502.1 428215.2
1998 2708430.86 31222.7 657843.5 487113.4
1999 3194014.97 19493 1169476.9 947690
2000 4582127.29 24822.9 1920900.4 701050.9
2001 4725086 28008.6 1973222.2 1017996.5
2002 6912381.25 94731.8 1649445.8 1018178.1
2003 8487031.57 94976.4 2993110 1225988.3
 70

2004 11411066.91 113309.4 4489472.2 1384000

2005 14572239.12 105955.88 7140578.92 1743200
2006 18564594.73 133594.99 7191085.64 1842587.7
2007 20657317.67 199257.94 8110500.38 2348593
2008 24296329.29 247838.99 9913651.13 2880200
2009 24794238.66 289152.57 8067233 3116985.6
2010 29205782.96 396377.16 10639417.37 3845720

Source; CBN Statistical Bulletin Volume 21 Dec 2010

APPENDIX II

The present sample is: 1986 to 2010

Variable Coefficient Std. Error t-value t-prob PartRy

Constant 1.0702e+00 2.2736e+00 0.471 0.6427 0.0104

NON-OIL 5 22.820 5 6.4128 3.558 0.0019 0.3762

OIL 1.5242 0.17188 8.868 0.0000 0.7892

GEX 1.3712 0.87242 1.572 0.1310 0.1052

Ry = 0.994426 F(3, 21) = 1248.9 [0.0000] a = 729982 DW = 2.72

RSS = 1.119034064e+013 for 4 variables and 25 observations

 71

APPENDIX III

The present sample is: 1986 to 2010

Testing for Heteroscedastic errors

Chiy (6) = 12.917 [0.0444] * and F- Form(6, 14) = 2.4942 (0.0745)

V01=NON-OIL V02=OIL V03=GEX

Heteroscedasticity Coefficients:

Constant V01 V02 V03 V0ly V02y

Coeff. 1.412e+010 -7.41e+006 9. 528e+005 –1.58e+006 -3.393 -0.07393

t-value 0.05616 -0.5382 1.628 0.8871 -0.05891 – 1.384

V03Y
coeff: 0.06557
t-value 0.7345

RSS = 1.01231e+025 å = 8.50342e+011