SOLID MINERAL EXPORTS, TRADE OPENNESS AND ECONOMIC GROWTH IN NIGERIA (1981– 2022)
Abstract
Abstract
Purpose: Nigeria is blessed with enormous solid minerals deposit distributed extensively across the various parts of the country such as Columbite, Tin, Copper, Gold, Iron ore and Coal It is on this basis that the study aimed to examine the effect of solid minerals’ exports on economic growth in Nigeria.
Method: The study used multiple regression models, employing time series data from the period 1981-2022. The center variables are Real gross domestic product as the dependent variable while solid minerals exports (SME), exchange rate (EXCR), interest rate (INTR) and the degree of trade openness(DTOP) are the independent variables. Autoregressive distributed lag (ARDL) technique was used to estimate the relationship between the dependent and independent variables. The hypotheses were verified with the use of T-test and Fisher F-test of significance. Pre-estimation tests such as Unit Root test, Auto-correlation test (Durbin Watson test), Cointegration test, Causality test, Correlation test were carried out to ascertain suitability of formulated models for robustness. Similarly, post-estimation tests such as Cumulative Sum of Squares of the residual (CUSUM Squares) Tests were carried out to ascertain the stability of the models for forecasting purposes.
Results: The result also confirmed a long run relationship between solid minerals exports and economic growth in Nigeria. It also revealed that exchange rate has positive and significant relationship with economic growth whereas interest rate has negative and significant relationship with economic growth. Trade openness also affects economic growth.
Recommendation: The study recommended among others that The study recommended that the government should restructure the Nigeria Mining Corporation with legal powers to operate in the same way which the Nigerian National Petroleum Corporation operates so as to boost its performance in the international market. The Federal government through the CBN should provide special support for indigenous companies in terms of creating an enabling environment and providing licenses for indigenous companies who intend to engage in the development and exploitation of solid minerals in Nigeria so as to bridge the gap in the production and supply chain of the solid minerals industry.
Keywords: Solid Minerals Export, Trade Openness Exchange rate, Interest rate, inflation rate, Economic Growth
