Breadth Without Depth? Export Diversification in Nigeria from Concentration and Comparative Advantage Indicators

Barnabas O. Obasaju; Ph.D.; Wumi K. Olayiwola; Ph.D.; Goodness C. Aye; Ph. D; Ademola A. Onabote; Ph. D; Oluwaseyi Oladunni

doi:10.56201/ijebm.vol.12.no4.2026.pg30.44

Breadth Without Depth? Export Diversification in Nigeria from Concentration and Comparative Advantage Indicators

Barnabas O. Obasaju, Ph.D., Wumi K. Olayiwola, Ph.D., Goodness C. Aye, Ph. D, ., Ademola A. Onabote, Ph. D, ., And Oluwaseyi Oladunni

Abstract

This paper examines the extent and nature of export diversification in Nigeria from 1996 to 2022. The study is motivated by the country’s persistent dependence on oil exports and by the policy assumption that growth in non-oil exports automatically reflects structural transformation. Using secondary trade data from World Integrated Trade Solutions and UN Comtrade, the paper applies three complementary indicators, namely the Herfindahl-Hirschman Index, the Theil Index, and Balassa’s Revealed Comparative Advantage index, to distinguish product variety from earnings concentration and to identify sectors in which Nigeria demonstrates relative export strength. The findings reveal a mixed but sobering pattern. Oil exports remained highly concentrated throughout the period, with very high HHI values and Theil values indicating substantial concentration, despite brief moderation between 2010 and 2012. Non-oil exports displayed a broader product spread, with HHI values generally low, averaging about 0.19 and ranging from 0.08 to 0.41. However, the non-oil Theil Index averaged about 0.99 and peaked at 1.61 in 2016, showing that export earnings within the non-oil basket remained heavily skewed toward a limited number of products. The RCA results further confirmed that Nigeria’s most persistent comparative advantage lay in fuels and raw materials, while manufactured and technology-intensive products remained weakly competitive. The paper concludes that Nigeria has achieved some widening of its export basket, especially in non-oil exports, but has not yet achieved deep and balanced diversification of export earnings. It recommends a more targeted export strategy centred on emerging competitive sectors, value addition, improved trade logistics, macroeconomic stability, and sustained policy coordination.

Keywords

export diversificationNigeriaHerfindahl-Hirschman IndexTheil Indexrevealed comparative advantagenon-oil exports

References

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Breadth Without Depth? Export Diversification in Nigeria from Concentration and Comparative Advantage Indicators

Abstract

Keywords

References

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