Credit supply and exports diversification: An empirical analysis of Nigeria

The main objective of this paper is to examine the impact of credit supply and other instrumental variables on export diversification in Nigeria. Over dependence on oil as major source of foreign exchange has been a concern because of the adverse effects of oil shocks on the economy. OLS regression method is used and the empirical results shows that bank credits promote export diversification but the influence is not significant. World price for agric products positively and significantly promote exports diversification and exchange rate negatively affect diversification. Rainfall strongly promotes exports diversification. There is therefore the need to increase credits to the agricultural sector and policies that stabilizes exchange rate should be taken. Also strategies to improve the competitiveness of agricultural products in the international markets are a crucial factor in promoting export diversification in Nigeria.