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Abstract

The determinants of solid mineral export price in Nigeria were considered using a time series data. It was observed that fluctuation in export prices of solid minerals affected investment in the sector with its concomitant effect on government revenue thereby creating imbalances in the economy. This has attracted significant attention in the literature, but empirical probe of the issue is scarcely pursued. The model was estimated using autoregressive distributed lag (ARDL) bounds testing approach to cointegration for the long-run analysis while an unrestricted error correction model was relied upon to explore the contemporaneous dynamics. The data obtained from various issues of the Central Bank of Nigeria statistical bulletins and annual reports covered the period 1981-2017. The study found that solid mineral export prices had long-run relationship with their determinants. In the short run, it was discovered that solid mineral export price had a positive and significant response to changes in exchange rate (0.03%), openness (0.42%) and dummy of illegal mining (0.05%) contrary to its 0.98% response to changes in world income and 0.02% in interest rate respectively. Therefore, government may consider low interest rate to enable investors obtain loans for importation of equipment for use in the sector. Also, effort should be intensified by the policy makers in making foreign exchange affordable to investing firms in Nigeria.