European Journal of Accounting, Finance and Investment

Non-Oil Exports Financing: An Implication For Economic Growth Nigeria

Akpan Joe Itah

Institute Of International Trade and Development, University of Port Harcourt, Nigeria

Obayori Joseph Bidemi

Institute Of International Trade and Development, University of Port Harcourt, Nigeria

Keywords: Catalyst, Credit, Exports, Financing, Growth, Interest rate, Non-oil

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Abstract

Non-oil exports serve as the catalyst that speeds up the rate of growth of the world economy. Thus, the success of non-oil exports depends to a great extent on the availability of finance to cater for the chain activities in exports business in processing, manufacturing, assembling, and packaging the goods for exports in order to generate revenues that will engender economic growth in Nigeria. Thus, the principal focus of this paper is to examine the implication of non-oil exports financing in the growth of the Nigerian economy. The specific objectives of the study were to; examine the implication of non-oil finance on economic growth; and implication of interest rate on economic growth. To do this, secondary data on non-oil exports financing, interest rate and real gross domestic product (RGDP) were collected from the Central Bank of Nigeria Statistical Bulletin. The main technique of analysis is the auto regressive distributed lag (ARDL) model. The Augmented Dickey Fuller (ADF) unit root test preceded the ARDL model in order to ascertain the stationarity of the variables under consideration. The ADF result showed that RGDP is integrated at order zero, while both non-oil exports finance and interest rate were integrated at order one. The ARDL result revealed that non-oil exports finance is positively related with economic growth. But interest rate is negatively related to economic growth. Based on the findings, it was recommended that; government should provide export credit guarantee and exports credit insurance to non-oil export. Also, government should implement measures that will reduce high rate of interest on non-oil export finance in order to attract more investors.