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ABSTRACT
The study examined the effect of Exchange rate movements on import and export trade in Nigeria.
Export and Import trade were segregated into oil and non-oil sectors. Secondary data were
sourced from The Central Bank of Nigeria (CBN) 2019 Statistical Bulletin covering thirty eight
years from 1981-2019. The study employed Error Correction model to estimate the co-efficient of
the variables. It was established that Exchange rate has positive and significant effect on oil export
in Nigeria. It implies devaluation of naira improve the revenue from oil export. Though, there is
instability of earnings from crude oil. In the same direction, exchange rate has positive effect on
non-oil export, oil import and non-oil import but the effect is not statistically significant. Exchange
rate movements also show that naira was devalued between year 2000 and year 2019. Despite
devaluation of naira which is expected to discourage imports by making the price of imports higher
in local currency. Non-oil importation was seriously on the increase. This is against the objective
of naira devaluation. Export diversification should be encouraged to improve revenue from nonoil
sector. The study recommends that exchange rate management policy focus on exchange rate
stability because of micro and macroeconomic planning implications.
Keywords: Exchange rate, Import, Export, Devaluation, Error Correction model. Full Text
