An empirical analysis of export supply response capacity in Nigeria

Abstract

The last two decades witnessed a significant fall in trade barriers in Nigeria in an attempt to boost trade and foster economic growth. The changes have been particularly marked in relation to the foreign trade regime. In spite of the significant trade liberalisation, considerably weak or sluggish non-oil export supply response still persisted in Nigeria. Using panel regression on macroeconomic data with a view to obtaining large sample size, implemented along with cross section fixed effect approach and correcting for contemporaneous correlation among the residuals, the study found significant information and establishment costs, as well as inclement macroeconomic environment that adversely impacted businesses in Nigeria and stalled their growth. In addition, it appeared that despite the substantial export bias, compensatory and complementary measures were inadequate to equalise the negative effect of export bias. Similarly, the analysis of survey data buttresses these findings.