“This report analyses the effects of real exchange rate (RER) movements (defined in terms of misalignment and volatility) on the growth of non-oil exports in Nigeria over the
period 1960—1990. RER is defined as the relative price of tradeables to non-tradeables, and RER misalignments are derived using a model based approach and the purchasing power parity (PPP) approach. Under both frameworks, RER volatility is defined in terms of the coefficient of variations of the RER. The results show that irrespective of the misalignment generating framework adopted, both RER misalignment and volatility adversely affected the country’s non-oil export growth. However, the results under the model based approach appear to be relatively more credible.”
