International Trade and Performance of the Nigerian Economy (1990-2017): A Causality Investigation

Abstract

The study investigated the relationship between international trade and performance of the Nigerian economy; for the period (1990-2017). Secondary data were used and collected from the Central Bank of Nigeria Statistical Bulletin. The study used Gross Domestic Product (GDP) and was employed as the dependent variable to measure the performance of the Nigerian economy; whereas, Import Trade, Export Trade and Trade Openness were also employed as the independent variables to measure international trade.Time series econometrics techniques were used to test the formulatedhypotheses. The result revealed that the variables do not have unit roots. There is also a long-run equilibrium relationship between international trade and performance of the Nigerian economy. The result confirmed that about 68% short-run adjustment speed from long-run disequilibrium. The study revealed that there is a causal relationship between international trade and performance of the Nigerian economy. The coefficient of determination indicated that about 62% of the variations of performance of Nigerian economy can be explained by changes in international trade variables.The study concluded that international trade had a causal relationship withperformance of the Nigerian economy.The study recommended that Government policies should be directed towards lifting trade barriers from local output.Government should embrace economic diversification in order to addressed the issue of monoculture export syndrome. Government should ensure political and economic stability so as to encourage investment, both local and foreign and guarantee business survival. Non-oil sector exports should be encouraged that will add value to the growth and development of the Nigerian economy.

Keywords: International trade, performance, Nigerian, economy. causality, approach