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This study investigates the Impact of Exchange Rate Regime Change on Non-oil Export in
Nigeria from 1985Q1 – 2018Q4. The paper employs Markov Regime-Switching Approach
to capture the exchange rate regime change. Results of the study reveal that exchange rate
regimes have a positive and statistically significant impact on the non-oil export in Nigeria.
The results also show that the degree of the impact in the two regimes are not the same, it is
higher in regime 2. This is as a result of the fact that prior to the 1980s; Nigeria adopted the
fixed exchange rate regime which does not allow for domestic currency devaluation hence,
the relatively low non-oil export. However, in the 1980s, especially at the introduction of the
structural adjustment programme of the 1986 which saw most economies of the world switch
over to the floating exchange rates regime, the Naira is often time devalued and hence the
higher increase in the non-oil exports. Therefore, the study recommends that there is need to achieve a stable exchange rate that when combined with the export-oriented policy will
promote non-oil exports in Nigeria.
