Performance Evaluation of Foreign Trade and Economic Growth in Nigeria

Abstract

Foreign trade plays a vital in restructuring economic and social attributes of countries around the world. The workings of an economy in terms of growth rate and per capita income have been based on the domestic production, consumption activities and in conjunction with foreign transaction of goods and services. Foreign trade has not help in promoting economic growth because the Nigeria economy still experience some element of economic instability and this trade has also turned the country into an import dependent economy.

The study focuses on the workings of trade on Nigeria economic growth. In carrying out this objectives, linear multiple regression model analysis was used in assessing various components of foreign trade. Ordinary least square, (OLS) techniques was used as a medium to achieve this objective. Data used in this study were extracted from CBN statistical bulletin, golden jubilee edition.

From the study, it was observed that export, import, and exchanged rate are all negatively related to real output of Nigeria with 19%, 8.7% and 52% respectively and the adjusted R² is 71% for the period, 1970 to 2005. With this, it could be said that, foreign trade policies should be reexamined and competitive produces should be produced by local industries.