IMPACT OF COCOA EXPORT ON NIGERIA’S ECONOMY (1986–2024): AN APPLICATION OF CO-INTEGRATION AND ERROR CORRECTION MECHANISM

Abstract

This study assessed the impact of cocoa export on Nigeria’s Gross Domestic Product (GDP) from 1986 to 2024 using s time-series data gotten from FAO, CBN, NBS, CRIN, and other relevant sources. Trend analysis was conducted using the exponential growth model, while the long-run and short-run relationships between cocoa export and Nigerian GDP were estimated using the ARDL methodology after confirming mixed co-integration orders through Augmented Dickey Fuller and Philip Peron unit root tests. The results revealed substantial fluctuations in cocoa export volumes across the study period, although cocoa export exhibited a significant annual growth rate of 11.54%, suggesting strong time-dependent expansion. ARDL bounds testing confirmed a long-run equilibrium relationship among economic growth, cocoa export, labor force, exchange rate, and other macroeconomic variables. In the long-run model, cocoa export, labor force, and real exchange rate significantly and positively influenced Nigeria’s economic growth, while capital formation and inflation exerted insignificant effects. The short-run ECM result showed a significant adjustment speed of 57% back to equilibrium annually. The findings underscore the importance of cocoa export as a vital non-oil revenue source capable of enhancing GDP growth. Strengthening cocoa production, improving export competitiveness, and stabilizing macroeconomic conditions remain essential for Nigeria’s sustainable growth.