The ECOWAS Common External Tariff (CET) and Macroeconomic Performance in Nigeria

Abstract

This study aims at providing empirical relationship between ECOWAS Common External Tariff and macroeconomic variables in Nigeria. The study made use of quarterly time series data between 2005:01 to 2012:04. The vector error correction model (VECM) model was used to measure the impact of CET on macroeconomic variables in Nigeria. The results revealed that common external tariff (ET) explained (0.006%) in the variance of domestic output (DO) in the 2^nd period and rose sharply to (0.02%) in the 4^th period. The effect of common external tariff (ET) on the explained variance of domestic output (DO) declined from (0.07%) to (0.08%) at both 6^th and 7^thperiod respectively. However, common external tariff effect (ET) on the variance of domestic output (DO) decline to (0.08%) at the 8^th periods and stabilized at (0.11%) until the 15^th period. The study observed that ECOWAS common external tariff (ET) have a positive but minimal effect on macroeconomic performance in Nigeria.

Keywords: Common External Tariff, Domestic Output, government expenditure, Balance of Trade