IMPACT OF INTERNATION TRADE ON THE ECONOMIC GROWTH OF NIGERIA 1980-2012.

IMPACT OF INTERNATION TRADE ON THE ECONOMIC GROWTH OF NIGERIA 1980-2012.

ABSTRACT

The Ordinary Least Squares (OLS) technique was used in this work to objectively examine the impact of foreign trade on Nigeria’s economic growth from 1980 to 2012. The underlying issues limiting Nigerian trade include the country’s narrow production and export base, which is dominated by low-value products such as raw materials and primary commodities, extremely high trade costs, and tariff and non-tariff impediments to intra-Nigeria trade. The particular aims are to determine the effects of exchange rate and trade policy changes on the Nigerian economy. In accordance with the study’s aims, two research questions and hypotheses were developed to lead the investigation. The literature was reviewed using the following headings: theoretical framework and empirical review. The research was based on Mercantilist Trade Theory, Hecksher-Ohlin Trade Theory, Endogenous Growth Theory, Absolute Advantage Trade Theory, and Comparative Advantage Theory. Independent variables such as policy changes (dummy), currency rates, and openness were regressed on Nigeria’s real GDP (GDP) using secondary data from the Central Bank of Nigeria Statistical Bulletin 2012. The Augmented Dickey-Fuller technique was used to perform econometric diagnostics for the presence of unit roots in the series, and the results show that the variables were integrated in the order of 1(1). The Johansen co-integration test was used to determine the co-integration of variables in various equations, confirming the absence of long-run equilibrium. The study’s findings found a negative and insignificant association between the country’s exchange rates and economic growth. However, various trade policies in Nigeria have been shown to slow growth in the country’s economic prosperity, with a negative and considerable influence on GDP growth. As a result, the study recommends that, because import and export trade have no significant effects on growth in Nigeria, the federal government implement programmes and policies to promote local production and discourage importation of certain essential products in order for trade to have the desired impact on Nigeria’s economic growth.

Chapter one

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

Today, we have the privilege of using products from sophisticated world countries that have emerged as a result of better or advanced global technologies. We even consume their food, wear their clothing, drive their cars, and so on without having to do it in their home nation.

We also get to experience the best items from neighbouring nations without having to visit there. All of this is made possible through international trade.

International trade has a direct impact on any country’s economy because it recognises the importance of exchanging ideas, products, and technologies. This influence could be favourable or negative at any given point in time.