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Exchange Rate Fluctuation and Real Sector Output in Nigeria: A Disaggregated Analysis (1986 – 2021)

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Exchange Rate Fluctuation and Real Sector Output in Nigeria: A Disaggregated Analysis (1986 – 2021)


Chrisphyna Ugochi Ahaneku | Ikenna Cyprain Egungwu | Amalachukwu Chijindu Ananwude



Chrisphyna Ugochi Ahaneku | Ikenna Cyprain Egungwu | Amalachukwu Chijindu Ananwude "Exchange Rate Fluctuation and Real Sector Output in Nigeria: A Disaggregated Analysis (1986 – 2021)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-1, February 2023, pp.1244-1263, URL: https://www.ijtsrd.com/papers/ijtsrd53838.pdf

This study examined the effect of exchange rate fluctuation on real sector output in Nigeria. It is the goal of every economy to have a stable rate of exchange with its trading partners. In Nigeria, this goal was not attained in spite of the fact that the country embarked on devaluation to promote export and stabilize the rate of exchange. Despite various efforts by the government to maintain a stable exchange rate, the Naira has depreciated throughout the 1980s to date. It is worrisome to note that Nigerian economy is under industrialized and its capacity utilization is also low. Specifically, this study examined the effect of exchange rate fluctuation on agricultural, industrial, building and construction, and trade sector outputs. It employed an ex-post facto research design and the main statistical was the Auto-Regressive Distributive Lag (ARDL) estimation technique using secondary data sourced from the Central bank of Nigeria statistical bulletins from 1986-2021. The result of the analyses revealed that exchange rate fluctuation had significant negative effect on agricultural sector output. Also, exchange rate was found to have a significant and negative effect on industrial, building and construction, and also trade sector output in Nigeria even though these effects were negative. The study concludes that although foreign exchange had significant effect on the real sector, such effect were negative thus displaying an inverse relationship. Sequel to these findings, there is a need for government at all levels (federal, state, and local) to actually invest in agriculture in an effort to match domestic demand and export to compete with crude oil for foreign exchange earnings. The Central Bank of Nigeria (CBN) is to provide foreign exchange relief measures for the acquisition of raw commodities that the nation naturally lacks while maintaining minimal exchange rate fluctuation to encourage local production by industries.

Exchange rate, real sector output


IJTSRD53838
Volume-7 | Issue-1, February 2023
1244-1263
IJTSRD | www.ijtsrd.com | E-ISSN 2456-6470
Copyright © 2019 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by/4.0)

International Journal of Trend in Scientific Research and Development - IJTSRD having online ISSN 2456-6470. IJTSRD is a leading Open Access, Peer-Reviewed International Journal which provides rapid publication of your research articles and aims to promote the theory and practice along with knowledge sharing between researchers, developers, engineers, students, and practitioners working in and around the world in many areas like Sciences, Technology, Innovation, Engineering, Agriculture, Management and many more and it is recommended by all Universities, review articles and short communications in all subjects. IJTSRD running an International Journal who are proving quality publication of peer reviewed and refereed international journals from diverse fields that emphasizes new research, development and their applications. IJTSRD provides an online access to exchange your research work, technical notes & surveying results among professionals throughout the world in e-journals. IJTSRD is a fastest growing and dynamic professional organization. The aim of this organization is to provide access not only to world class research resources, but through its professionals aim to bring in a significant transformation in the real of open access journals and online publishing.

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