Trade liberalization and economic growth in Nigeria

Abstract

This study examined the impact of trade liberalization on economic growth in Nigeria. The general objective of the study was to find out if there is any effect of trade liberalization on economic growth in Nigeria. The study used ex-post facto research design and moreover, the ADF and Phillips-Perron unit root tests were used for the test of stationarity while the study employed ARDL – Bound test to test for the long run relationship between the variables. The scope of the study covered the period from 1981 – 2019, the variables used for the study were real economic growth as the dependent variable whereas total trade balance, total export trade, total import trade and exchange rate were used as the independent variables. To this point, the study found that a percent rise in total export trade brought about 0.84% increase in economic growth in Nigeria. One percent rise in total import trade brought about 0.59% decline in economic growth in Nigeria; whereas a percent rise in exchange rate brought about 0.31% decline in economic growth in Nigeria. However, the study recommended that government should try as much as possible to restrict importation of those goods and services that are locally produced in the country in order to avoid dumping of foreign goods and services as well as over dependent of imported goods and services in the country. Government should also try as much as possible to put up policies and programs targeted at increasing locally produced export-oriented goods and services in the country in order to increase more export of goods and services which will invariably lead to economic growth in the country.