Impact of International Trade On Economic Growth in Nigeria (1980-2015)

Filed in Articles by on October 27, 2020

Impact of International Trade On Economic Growth in Nigeria (1980-2015).


This study was intended to examine if international trade has any impact on Nigeria’s economy growth and to see if it impacts positively or negatively.

This study was guided by the following objectives; To examine the factors that hinders the success of international trade in Nigeria, To examine also the trade policies i.e. restrictions Nigeria has imposed on international trade and how favorable such policies has been.

To examine the impact of the exchange rate system in Nigeria, To make necessary policy recommendations based on the findings of the study.

In other to adequately capture and empirically investigate and analyze the impact of international trade on the economic growth of Nigeria, a multiple regression econometric model was used.

In the investigation on the impact of international trade on economic growth, a unit root test was carried out on the data using the Augmented Dickey Fuller (ADF) test to know if the data are stationary, if integrated at order zero (0), if integrated at order one (1), if integrated at order two (2).

Secondary data gotten from secondary sources particularly from the Central Bank Of Nigeria statistical bulletin and the National Bureau of Statistics were used and data was analyzed using the regression statistical tool at 5% level of significance which was presented in frequency tables and percentage.

The study findings revealed that National savings plays an important role in the process of economic growth as it provides for investment which in turn creates employment opportunity for its labour force, thus increasing their income and aggregate demand and thus leading to economic growth.

In our estimated model, we found national savings as positively influencing economic growth. Trade openness in any economy is as a result of globalization.

Labour productivity also determines the growth of any economy. This study is useful to researches as it provides an econometric evidence of the impact of international trade on the growth of the Nigerian economy.


Background to the Study

In our economy today we are privileged to make use of the advanced world countries’ products having risen from improved or advanced technologies of the world.

We even eat their type of food, wear their type of cloth, and drive in their kind of cars etc. without having to do all these in their country.

Also we enjoy the best of products from neighboring countries without having to travel there to get or use it. All these are made possible by international trade.

International trade has a direct effect on the economy of any country as the country sees the need for the exchange of ideas, products and technologies. This effect could either be positive or negative at each given point in time.

International trade can be traced back to the need for exchange which evolved from the barter system to the money system.

International trade became popular with the advent of the colonial rule that brought their wares and made Nigerians their middle men.


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