EXCHANGE RATE VOLATILITY AND IMPORT VOLUME: XRAYING NIGERIA’S ECONOMIC DEPENDENCE

AGBAEZE, Clifford Chinasa
Department of Banking and Finance
Michael Okpara University of Agriculture, Umudike
cliffagbaeze@gmail.com
ALAMBA, Samuel Chukwuma
Department of Business Administration
Michael Okpara University of Agriculture, Umudike
alamba.chukwuuma@mouau.edu.ng
EJELONU, Henry Onyebuchi
Department of Economics
Michael Okpara University of Agriculture, Umudike
onyebuchihenry.ejelonu@gmail.com
ABSTRACT
The study examined exchange rate volatility and import volume by X-raying Nigeria’s economic
dependence between 1981 and 2020. The study used autoregressive distributive lag model (ARDL) in
analyzing ordinary time series data on non-oil import, trade openness, inflation rate and exchange rate
volatility. The findings showed that non-oil imports and trade openness endogenously contribute to
Nigeria’s import volume more than official exchange rate volatility. The study concluded that, in the
face of other internal and external macroeconomic shocks, official exchange rate Volatility (EXRVT)
has a minimal economic influence on the amount of imports in Nigeria. The study thus recommends
that, government should stimulate import liberalization by lowering tariff rates, gradually remove nontariff barriers, and prohibit some items to ensure that import volume of consumables decreases, while
diversifying the economic base of the Nation to engender increased export volume.
Keywords; Import volume, non-oil import, official exchange rate, trade openness, money supply,
inflationary trend