An Autoregressive Distributed Lag Method for Tourism Receipts and Economic Growth in Nigeria

Abstract

This study investigated the impact of tourism receipts on economic growth in Nigeria between 1992 and 2017. The data used were sourced from the Central Bank of Nigeria Statistical Bulletin and the World Bank Development Indicators. The study employed the Auto Regressive Distributed Lag technique to analyse the data. In other to test for the stationarity of the time series data used, the Philip Perron unit root test was employed and it was confirmed that only international tourist arrivals was stationary at level while tourism receipts, tourism investment, gross domestic product growth rate, receipts for passenger transport items as well as receipts for passenger travel items were all stationary at first difference. Furthermore, the bound test results showed the existence of a long-run cointegrating relationship among economic growth, tourism receipts, tourism investment, international tourist arrivals, receipts for passenger transport items and receipts for passenger travel items. In addition, the estimated long run coefficient of the ARDL showed that tourism receipt, tourism investment, exchange rate and gross capital formation had a positive and significant impact on economic growth. It was also discovered that tourists’ arrivals and receipts for passengers travel items inversely related with economic growth. The study concluded that tourism receipts had significantly influenced economic growth in Nigeria. Consequently, government should urgently put in place policies that could increase the level of tourism receipts in the country. Also, adequate security and basic infrastructural facilities should be provided for both domestic and foreign tourists as this would ensure the influx of international tourists.