Currency devaluation on the Exportation Revenue: A study of Nigeria, South Africa and China (2000-2017)

Abstract

The study examines the impact of currency devaluation on total export revenue in Nigeria, South Africa and China. Secondary data were sourced from World Bank Data Atlas for inflation rate (INFR), exchange rate (EXR), money supply (MS) and total export revenue (TER) for the period of 2000 to 2017 and were subjected to Augmented Dickey Fuller and Philip Perron Unit Root test, Johansen Co-integration and Vector Error Correction Model. The study discovers that EXR, INFR and MS were unable to impact exportation revenue in Nigeria and South Africa while showing strong impact on exportation revenue of China. The result also shows that only China enjoys long run relationship while Nigeria and South Africa currency devaluation variables showed absence of long run relationship with exportation revenue. Thus, the study concludes that currency devaluation in China impact negatively on the export position of Nigeria and South African economies. Hence, the study recommends maintenance of China’s currency devaluation position while Nigeria and South Africa should re-evaluate and re-adjust their currency devaluation procedures to improve exportation revenue.

Keywords: Currency depreciation, Exchange Rate, Inflation Rate, Money Supply, exportation performance

DOI: https://doi.org/10.37745/ejaafr/vol8.no3.pp38-58.2020

Article Review Status: Published

Pages: 38-58 (Download PDF)

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