EFFECT OF EXCHANGE RATE FLUCTUATIONS ON EXPORT PERFORMANCE IN NIGERIA
By
DOARTHY ALIKA
Abstract
This study examined how exchange rate fluctuations affected export performance in Nigeria from 2015 to 2025. The naira’s persistent volatility has concerned policymakers and exporters, given the country’s reliance on oil and non-oil exports. To show the incremental impact, the study also presents a hypothetical scenario with no exchange rate volatility. Here, the naira is assumed stable, which could raise export growth due to predictability and competitiveness. The study used an ex post facto design with secondary time-series data from the Central Bank of Nigeria, the National Bureau of Statistics, and the World Bank. Key variables included exchange rate (₦/USD), export values, inflation, and GDP. Descriptive statistics, correlation analysis, and OLS regression were used to study the effect of exchange rate movements on exports.
Regression results showed exchange rate fluctuations had a significant negative effect on Nigeria’s export performance during the study period. Specifically, a 1% naira depreciation led to about a 0.65% reduction in export growth, holding other macroeconomic factors constant. GDP had a positive, significant relationship with exports, showing that strong domestic output supports trade. Inflation had a negative but insignificant impact. These findings highlight the importance of exchange rate stability for sustained export growth and investment.
The study concludes that achieving greater exchange rate stability through sound monetary and fiscal coordination, diversification of export products, and improved trade infrastructure is essential for enhancing Nigeria’s international competitiveness. The results provide valuable insights for policymakers, financial analysts, and international business strategists in developing responsive exchange rate policies that strengthen export performance and foster long-term economic sustainability.
Keywords: Exchange rate, Export performance, Macroeconomic stability, Exchange rate volatility, Nigeria, Economic growth.
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