Trade Openness and Economic Growth in Nigeria

Abstract

The study examined the effect of trade openness on the economic growth of Nigeria, using the Gross Domestic Product (GDP) as the dependent variable. Secondary data were used spanning from the year 1981 to 2018. Ordinary Least Squares (OLS) was used to estimate the effect of openness of trade on economic growth in Nigeria. Data for the study were sourced from World Development Indicators of the World Bank and the Central Bank of Nigeria (CBN) Statistical Bulletin. Results of the analysis indicate that trade openess has positive effect on economic growth in Nigeria, with an evidence of a long-run relationship. Results also contravene the a priori in the case of export and import which showed negative and positive signs respectively. For the reason above, it was recommended among others that an enabling environment should be provided by the government in the areas of infrastructural facilities to boost domestic production to enable them produce goods and services that can compete with their foreign counterparts in the international market to enhance further growth in Nigerian economy.

Keywords: Trade Openness, Economic Growth, Gross Domestic Product.

JEL Classification:  F18, F21, O11, O47

DOI: 10.7176/JESD/11-4-19

Publication date: February 29^th 2020