Musa Ibrahim, Mohammed Ishaka Gani, Sarah Ali Agara
Department of Economics, Faculty of Social Sciences, Federal University of Lafia, Nasarawa State, Nigeria
Abstract
This research is examined the effect of exchange rate on imports in Nigeria from 1990 to 2023. The Autoregressive Distributed Lag (ARDL) co-integration technique was adopted in line with the theoretical relationship between the concepts (exchange rate, imports, inflation, and real GDP) as established by some theories in international economics. The empirical evaluation of the relationship between the key concepts commenced systematically. It comprised pre-estimation tests (unit root test), and then from the result of the ARDL bound test the study discovered traces of co-integration or long-run relationship. That means there was a presence of both long-run relationship between imports and the independent variables (exchange rate, inflation, and real GDP). Thus, ARDL-ECM regression analysis was adopted, and then some diagnostics or postestimation tests were carried out. From the Augmented Dickey-Fuller (ADF) test, the variables were either stationary at level or first difference. The Granger causality test showcased a unidirectional causality between exchange rate and imports in Nigeria. The first objective of the study was to examine the effect of exchange rate on imports in Nigeria. Based on empirical and theoretical literature, the effect of exchange rate on imports in Nigeria should be significant. The study adopted the ARDL framework for its empirical analysis. The result of the ARDL showed that exchange rate has a significant effect on imports in Nigeria in both the short run and the long run. The second objective was to assess the long-run effect of exchange rate on imports in Nigeria. The findings revealed that exchange rate has a strong long-run impact on imports, showing that persistent fluctuations in exchange rate significantly influence the volume of imported goods in Nigeria. The third objective was to determine the nature of causality between exchange rate and imports in Nigeria. The study used the pairwise Granger causality technique to achieve this objective. The findings of the study revealed that there exists a uni-directional causality flowing from exchange rate to imports in Nigeria.
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Journal Name :
International Journal of Asian Economic Light (JAEL)

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Published on : 2026-03-06

Vol : 14
Issue : 3
Month : March
Year : 2026
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