Abstract:
Since the oil boom of 1970’s, oil sector remained the dominant sector in the Nigerian Economy
accounting for measure shares of export, revenue and foreign exchange earnings. This over
dependence on oil has subjected the economy to high level of economic instability in response
to external disturbances. A lot of efforts have been made by the government to diversify the
economy, but failed due to corruption and lack of proper implementation. Most of the goods
exported from Nigeria to other countries are primary commodities whose prices are highly
volatile. Export diversification has a lot of advantages which include: boosting the country’s
output, higher per capita income, rising foreign direct investment, improvement of terms of
trade, reduction of export instability, stablisation of export earnings, increase in productivity
among others. The study examines the long run and short run dynamic effects of export
diversification on economic growth in Nigeria over the periods 1970 to 2015 using
Autoregressive Distributed Lagged Model. The findings of the study revealed that export
diversification has significant positive impact on per capita income, foreign direct investment
and economic growth both in the short run and long run. The study therefore, recommended
that research and development as well as export promotion strategies should be properly
designed and implemented.
