The impact of passenger's traffic on exchange rate and economic growth in Nigerian aviation industry

Abstract

The aim of this study is to examine the impact of passengers’ traffic on Exchange Rate (ER) and economic growth in Nigerian aviation industry. This study adopts an ex-post facto research design, a systematic empirical inquiry in order to carry out the research. Secondary data was obtained from the Federal Airports Authority of Nigeria (FAAN) and National Bureau of Statistics (NBS). The study employed trend analysis on the time series data and regression analysis to explore the cause-and-effect relationship among variables. The result showed that the trend of exchange rate and aviation contribution to Gross Domestic Product (GDP) have been on increase over certain periods. Hence, the linear trend line shows a steady increase in the pattern of exchange rate and economic growth over the sample period of 2000 to 2020 with R-squared values of 0.714 and 0.824, respectively indicating a good fit of the line to the data. The regression analysis revealed that Passengers’ Traffic (PT) has a positive impact on ER and economic growth. Thus, with a T-statistic of 3.296 and probability of 0.004, it indicates a statistically significant effect on the dependent variable (i.e. Exchange Rate). Also, with a T-statistic of 6.119 and probability of 0.000, it indicates a statistically significant impact on the dependent variable (i.e. Economic Growth).