Introduction Exportation can be described as very important in a country’s quest to enhance its revenue base and move the economy on the path of growth and economic progress. This is what is described in economic literature as export-led growth. As identified by Abou-Strait (2005), Adenugba and Dipo (2013) and Sheridan (2014), export provides an impetus for growth and is thus a necessary catalyst for the overall development of an economy. Being an important participant in foreign trade, developing countries can be able to generate sufficient foreign capital inflow to drive their growth process. As foreign earnings increase due to export expansion, domestic production capacity tends to expand, employment level increases, unemployment falls and aggregate demand is boosted and domestic investment expands further. Export expansion also helps to maintain a favourable trade balance consequently leading to a favourable balance of payment position especially for a typical developing country. In Nigeria where the level of domestic investment is very low and coupled with the fact that oil export which has so far provided the main foreign earnings for the economy is presently facing serious short fall due to the on-going fall in crude oil prices in the international market, it is expedient to source alternative means for raising foreign exchange earnings. This can be done the diversification of the export base of the local economy from crude oil export to non-oil exports to ensure that the economy can be self-sustaining without having to resort to huge debt acquisition. The inability of the Nigerian economy to balance the development of the industrial sector and agricultural sector vis-à-vis the oil sector has been identified as the one of the major reasons while it remains a developing country (Anyanwu et al., 1997; Adenugba and Dipo, 2013). Recent evidence in Nigeria (Soludo, 2007; Aigbokhan, 2008; Olayiwola and Okodua, 2010; Onodugo et al, 2013) was able to identify noticeable contribution of the non-oil sector to the country’s economic growth over the last decade. The Central Bank of Nigeria (CBN) has specifically attributed the country’s GDP growth from 6.9 per cent in third quarter to 7.1 per cent in the fourth-quarter of 2012 to increase in the contribution of the industrial sector.
This is so owing to the fact that, while the performance of the oil sector dwindle as crude oil exports fell by 28.19%, non-oil exports improved by 40.72% in 2009. This helped the country to absorb the global financial shock experienced that year. The National Bureau of Statistics (NBS) also reported that in the fourth quarter of 2011, the non-oil sector grew at 9.07%, which is higher than the 8.93% growth recorded in the last quarter of 2010 (Onodugo et al, 2013). It thus implies that the export base of the Nigerian economy from oil to non-oil will provide impetus for a sustained growth process which will fast track domestic investment and reduce unemployment. It is well documented in literature that developing countries heavily rely on primary products exports (e.g. crude oil and agriculture). And empirical studies from Crespo-Cuaresma and Wörz (2005), Hausmann et al (2007), Berg et al (2012), Jarreau and Poncet (2012) and Sheridan (2014) has shown that countries that place emphasis on manufacturing exports will achieve a faster economic growth rate than those which depend solely on primary exports.
The argument is that countries which export products with a relatively high technological content tend to benefit from positive externalities that positively impact their economic expansion beyond the scope of their imagination. Positive externalities may likely originate from economies of scale and knowledge spillovers. Thus, active participation in the international market can enable a country to acquire better and more efficient production techniques, and it can also make the country benefit from increased specialization as well Sheridan (2014)