Exchange Rate Fluctuations and Sectoral Performance of the Nigerian Economy (1980- 2016)

Afolabi Adejumo
Office of the Economic Adviser to the President, Abuja

Abstract

The Nigerian economy is classified into five interrelated sectors; the agriculture, Industry, construction, trade and services (CBN 2016). Some of these sectors have contributed to the national output and government revenue at different point in time. Agricultural sector comprises four subsectors which cut across crop production, livestock, fisheries and forestry. The industry revolves around mining and quarrying, crude petroleum and manufacturing subsectors. Building and construction as well as the wholesale and retail trade have no subsector while the service sector has the highest number of subsectors. The service subsectors include transport, communication, utilities, hotel and restaurant, finance and insurance, real estate and business services; producers of government service as well as commercial, social and personal services. The outputs of these various sectors are affected by the movement in the exchange rate. The manufacturing sub-sectors' contribution to the Nigerian economy is limited by the fluctuation in the exchange rate because most of the inputs used in production in this sub-sector are imported, therefore, the depreciation of Nigerian currency increases the cost of production in this sub-sector.


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