This study examined the regime-dependent impact of exchange rate movements on non-oil export performance in Nigeria from 2008M1 to2025M12 using a Markov-switching regression framework. The analysis reveals that the effect of exchange rate depreciation on exports is neither uniform nor constant over time, but critically conditioned by underlying macroeconomic and structural environments. In the first regime, interpreted as a relatively favourable export regime, exchange rate depreciation exerts a strong and statistically significant positive effect on non-oil exports. In contrast, the second regime is characterized by a weaker, though still positive, exchange rate effect on non-oil exports. The results demonstrate that both strong and muted exchange rate effects can coexist within the same economy, depending on prevailing domestic conditions. The study emphasized that exchange rate flexibility must be complemented by stable foreign exchange access, targeted export financing, and structural reforms if Nigeria is to achieve sustained non-oil export growth and diversification.
Ogwuche et al. (2026) studied this question.