Page 36 - Azerbaijan State University of Economics

Chibuike R. Oguanobi, Geraldine E. Nzeribe, Chukwunonso S. Ekesiobi: Export promotion
in Nigeria: has the impact of banking sector reforms been felt?

indication that models 6.1 and 6.2 differ only in their locations, implying that they
are parallel regression models. The economy of Nigeria fared better in the era of
banking sector reforms only by NGN6268.951 intercept compared to the pre-reform
period. The implication of this outcome is that even if Nigeria had closed its border
between 2004 and 2014 and earned zero revenue from export, its national income
would have still grown by about 579.5 percent per annum.
Though insignificant at explaining what happens to Nigeria‟s income, the
differential slope coefficient has shown that the economy fared better in the era of
banking sector reform than in the preceding era. Nigeria‟s export earnings during the
period increased by about 594.4 percent. This indeed has absolutely little to say
about the country‟s gross domestic product value.
The implication of this result is that the modern banking sector reform which
came into existence in Nigeria by 2004 has yielded results far below the level
desired by the economy, especially as contributed by the export sector. This is
however ironical. Nigeria as we all know is a country abundantly blessed with
natural and human resources. With a population currently estimated at about 183
million, Nigeria is one of the ten largest producer and exporter of crude oil. A highly
significant proportion, if not all of Nigeria‟s oil output goes out as export as the
country had no active refinery between 2004 and 2014. It then follows that the
proceeds of the country‟s crude oil export rather than entering Nigeria‟s treasury, are
diverted to private pockets/bank accounts of political office holders. No wonder the
immediate past administration (government of Dr. Goodluck Jonathan) was
seriously alleged to have diverted over $20 billion United States, money meant to be
deposited in the account of the Nigerian National Petroleum Corporation (NNPC)
with the Central Bank of Nigeria (CBN). This result however does not conform to a
priori expectation, as a country producing nearly 3.0 million barrels of oil per day is
expected to have its national income being significantly influenced by its export
proceeds.

8. Summary and conclusions
In this study, we ascertained if banking sector reforms embraced upon by
Nigeria about 2004 has actually enhanced the contribution of export to the country‟s
economic performance proxied by its gross domestic product. Applying the dummy
variable approach to this structural sensitivity problem, we found that Nigeria‟s
GDP responded insignificantly to export proceeds both prior to and during the
banking sector reforms. This could imply that so far, the reforms had no serious
effect on the economy, with respect to its objective of supporting local industries in
their efforts to contribute to the diversification of the country‟s export trade.

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