Exchange Rate Fluctuation and Tourism Sector Output in Nigeria

Ogbeba Ehigocho Peace, Oji-Okoro Izuchukwu and Abba Abubakar Shehu
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Ogbeba Ehigocho Peace: Faculty of Social Sciences, Federal University Lafia, Nasarawa State, Nigeria
Oji-Okoro Izuchukwu: Faculty of Social Sciences, Federal University Lafia, Nasarawa State, Nigeria
Abba Abubakar Shehu: Northwest Zonal Campus, Bagauda Kano, Nigeria

International Journal of Management Science and Business Administration, 2016, vol. 3, issue 1, 48-55

Abstract: It has been a major source of contention among economics scholars, that tourism is a major driver of socio-economic development in the world and serves as a major source of revenue across countries. Hence, this paper examines the effects of exchange rate fluctuation on tourism sector output in Nigeria for the period of 1995 to 2015, using the Vector Error Correction Model (VECM), granger causality test and co-integration approach to ascertain this relationship. Results revealed that exchange rate fluctuation indeed has a significantly negative effect on tourism sector output in Nigeria, and that an increased fluctuation reduces the contribution of the tourism sector to GDP. The granger Causality test result showed that there is a unidirectional causality and long run relationship between contribution of tourism sector to GDP and the contribution of the Tourism sector to employment, real effective exchange rate, and the international number of tourist arrival. Among various recommendations in the study is for the government of Nigeria to review existing economic policies that affect the exchange rate fluctuation, as these some of this policies may be responsible for the consistent increase in exchange rate fluctuation , as these could substantially reduce the number of tourist arrival and tourism sector output.

Keywords: Exchange Rate Fluctuation; Tourism Sector; Granger Causality; Vector Error Correction; Gross Domestic Product. (search for similar items in EconPapers)
JEL-codes: M00 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mgs:ijmsba:v:3:y:2016:i:1:p:48-55

DOI: 10.18775/ijmsba.1849-5664-5419.2014.31.1005

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