Export Diversification And Growth: An Empirical Study Of The Recent Performance Gap Between Nigeria And Ghana

This study examines the impact of export diversification on economic growth in Nigeria and Ghana. The study employed the Autoregressive Distributed Lags (ARDL) regression technique on annual time series data covering the period 1995 to 2018. The results from the ARDL estimates show that in the short run, export diversification was insignificant in Nigeria but significant in Ghana. In the long run in Nigeria, the coefficients of exchange rate, economic openness, gross fixed capital formation (GFCF) did not impact growth, however, export diversification impacted growth. For Ghana, although export diversification was negatively significant, economic openness, exchange rate, GFCF all had positive and significant impact on growth. The empirical results clearly show that economic openness, the quality of a country’s total labour force are key drivers of growth. Also, findings show that revenue obtained from top five export products of Nigeria is highly dependent on petroleum, while Ghana’s revenue is evenly distributed around gold, petroleum and cocoa. From the empirical findings, the study recommends that Nigerian government should pursue policies targeted at not just promoting diversification of exports but economic policies that can act as catalyst to attract more foreign investment, such as tax incentives, regulatory exemptions, etc.