IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 10 NO. 11 2024
DOI: 10.56201/ijebm.v10.no11.2024.pg72.89

---

Economic Integration and Trade Tax Revenue Issues in Nigeria

Samuel Ochinyabo

---

Abstract

This study was undertaken given that Nigeria is a developmental state that requires financing, more so that the country has been trying to diversify revenue source from the volatile oil revenue, but it is in the same vein pursuing economic integration that has revenue consequences. The objective was to evaluate the effect of economic integration on trade tax revenue in Nigeria. The study sourced secondary data from CBN statistical bulletin and Transparency international, utilizing Multivariate cointegration estimation technique. Findings indicate that economic integration has significantly adversely affected trade tax revenue in Nigeria for the period of the study. Hence, the study recommends; it is important for the country to fully understand and implement foreign trade agreements in a conducive macroeconomic environment. There is an urgent need to deepen and diversify the productive base of the economy to develop, reinvigorate and widen domestic tax bases, while institutions of government like the anti-corruption agencies should be motivated to carry out their duties effectively to shield the country from the manipulations of powerful rent-seeking economic agents.

keywords:

Economic Integration, Trade tax, Fiscal Deficit, Revenue

---

References:

Afesorgbor, S. (2013); Revisiting the Effectiveness of Africa Economic Integration: a Meta-
Analytical Review and Comparative Estimation Method. Institute of Social Sciences
Working Paper (520), 28 – 60.

Ayatak and Kilic (2014). The Short and Long Term Effects of Trade Taxes on Vertical
Specialization. Asian Economic and Financial Review, 2014 Vol. 4(6), 732-743.

Balassa B (1966). The Theory of Economic Integration. London: Richard D. Irwin, p. 304.

Balassa, B. (1961). Types of Economic Integration. Proceedings of the Fourth Congress of
International Economic Association in Budapest, pp 17-31.

Baunsgaard, T and M. Keen (2005), Tax Revenue and (or?) Trade Liberalization, Washington
D. C., International Monetary Fund working paper WP/05/112.

Bonaglia, F. and K. Fukasaku (2003) Export Diversification in Low-Income Countries: An
International Challenge After Doha, OECD Working Paper No. 209, OECD
Development Centre.

Bourdon, M.H., and Viji (2013). The Relationship between Trade Openness and Economic
Growth. Some New Heights on the Openness Measurement Issue. ANR-12-JSHI-0002-
01, France.

Breusch, T.S., and R. Pragan (1971). Testing for Autocorrelation in Dynamic Linear Models
Australian Economic Papers, Vol. 17

Cage, J. and Gardenne, L. (2012) The Fiscal Cost of Trade Liberalization; Paris School of
Economics Working Paper No. 2012-27




Central Bank of Nigeria, (various years), Annual Statistical Bulletin. Lagos: CBN Press.

Central Bank of Nigeria, (various years), Economic and Financial Reviews. Lagos: CBN Press.

Chow, G. (1960). Tests of Equality between Sets of Coefficients in Two Linear Regression
Econometrica 10/28, No. 3 Corruption,” IMF Working Paper 98/135 (Washington:
International Monetary Fund).

Daniel, L. (2007). A Guide to Measures of Trade Openness and Policy. WEA session papers,
England

David, H. L (2009). A Guide to Measures of Trade Openness and Policy, Indiana University,
South Bend, USA

Dickey, D.A., and Fuller, W. (1981), ‘Likelihood ratio statistics for autoregressive time series
with a unit root’, Econometrica, 49, 1057-1072.
Emeka, A. (2010) Trade Openness and Output Growth in Nigeria: An Econometric Analysis
1970-2007, (Unpublished Work Caritas University) Enugu.

Engle, R.F. and Granger C.W.J (1987) Cointegration and error correction: representation,
estimation and testing. Econometrica, 55, 251-276.

Engle, R.F. and Granger C.W.J (1991) Long-Run Economic Relationships: Readings in
Cointegration, (eds.) Advanced Texts in Econometrics, Oxford University Press,
Oxford.

Enrico, L. (2009) Trade Liberalization and Trade Tax revenue in Africa Countries. Working
Paper Series, Dept of Economics University of Milan – BICDCCA.

Ghali K.H (1998). Public Investment and private capital formation, in a vector error correction
model of growth. Applied Economics 32, 1819 – 1829

Ghani, G. (2011) The Impact of Trade Liberalization on the Economic Performance of OIC
Member Countries. Journal of Economic Cooperation and Development, 32. 1 (2011).
1-18.

Ghura, D.(2006): “Tax Revenue in sub-Saharan Africa: Effects of Economic Policies and

Corruption,” IMF Working Paper 98/135, (Washington

Gonzalo, J. (1994). The Alternative Methods of Estimating Long run Equilibrium Relationship.
Journal of Econometrics 60:203-233.

Goode, R. (1987), Tax Effort in Developing Countries, Econometrica 49:185-202.




Granger, C. W. J and P. Newbold. (1974). Spurious Regressions in Econometrics: Journal of
Econometrics, 2, 111 - 120.

Grossman, G. and E. Helpman (1991). Innovation and Growth in the Global Economy”,
Cambridge: MIT Press.

Gudissa, L., and Mishra, D. K. (2014). The Contribution and Trend of Tariff Revenue in the
Ethiopian Tax Structure. Journal of Economics and Sustainable Development, volume
5(13), pp 23 – 52.

Gujarati, D. N., and D, Porter (2006): Basic Econometrics, 4th Edition, Tata McGraw-Hill
Publishing Ltd, New Delhi.

Gupta, S. A (2007), Determinants of Tax Revenue Efforts in Developing Countries.

International Monetary fund working paper no WP/ 07/ 184

Harrison, A (1996) Openness and growth: A time-series, cross-country analysis for developing
countries” Journal of Development Economics, 48:419-47.
Helpman, E and P. Krugman (1985), Market Structure and Foreign Trade (Brighton: Wheat

sheaf Press).

Ibraheem, K.N., Umar, G. and Ajoke, A.F. (2013) Corruption and Economic Development:
Evidence from Nigeria, Kuwait Chapter of Arabian Journal of Business and
Management Review Vol. 3 (2) October.

Jarque, C.M., and Bera, A.K (1987). A Test for Normality of Observations and Regression
Residuals. International Statistical Review, Vol. 55.

Jhingan, M. L (2004) Money, Banking, International trade and Public Finance; Vrinda
publications (P) Ltd. New Delhi.

Johansen, S. (1988) Statistical Analysis of Cointegrating Vectors. Journal of Economic
Dynamics and Control, 12 (1), 234-254.

Kebede, S.B., Fekadu and Aredy, J. (2011) Trade Liberalization and Poverty: A Macro-Micro
Analysis in Ethiopia. Proceedings: German Development Economics Conference No.
44, Berlin.

Khattry, B.,and Rao, J,M. (2002).Fiscal Faux Pas?: An Analysis of the Revenue implications
of Trade Liberalization, World Development Report, 30(8), 1431-1444.

Lawrence, M.,(2011), Adequacy of Tax revenue and the national budget deficit in Uganda
before and after the reforms of (1980-2008); (unpublished dissertation submitted to
school of post graduate studies in Economics of Makerere University), Kampala.




Lipsey R.G. (1957). The Theory of Customs Union: Trade Diversion and Welfare, Economica,
Vol. 24, p 40-46.

Lipsey, R. G. (1966): Customs Unions and Economic Development, in Wionoczek (1966a) p

32-41.

Lipsey, R.G (1960). The Theory of Customs Unions A General Survey, Economic Journal,Vol.
70, p 496-513

Markevicius, N. (2011) Optimisation of Degree of Economic Integration Between – Lithuania
and Belarus. Socialiniu Mokslu Studijos Sociaetal Studies, 3 (1), p. 107-121.

Meade, J.E. (1955): The Theory of Customs Union. North Holland.

Meier, G. (1995). Leading Issues in Economic Development, Oxford University Press, London

Morgan, C.W. and Kanchanhataki, S. (2012) Trade Liberalization and Economic Growth.
Journal of Development Economics, volume 67, pp 229-244.

NBS (various years) Annual Abstract of Statistics, Abuja

Nwosa, P., Saibu M. and Fakunle O. (2012) The Effect of Trade Liberalization on Trade Tax
Revenue in Nigeria; Africa Economic and Business Review, Vol. 10(2) Fall 2012. ISSN
1109-5609.

Obadan, M.I. (2006)..Prospects for diversification in Nigeria's Export Trade, in Diversification
Strategy for Nigeria's Economic Development. Proceedings of annual conference of the
Nigerian Economic. Society, Heinemann Press, Ibadan, pp. 33-53 Unpublished press.

Obokoh, L.O. (2008) Trade Liberalization and Small and Medium Sized Enterprises (SMES)
Failures in Nigeria. Banks and Bank Systems Review 3(3): 51-61.

Ogbeidi, M. (2012) Comparative Integration: A Brief Africa Analysis of the European Union
and ECOWAS, Journal of International Social Research Vol. 3 (10), Writer 2010.

Ogujiuba, K. K., Oji, G.O. and Adenuga, A. (2004). Is Trade Openness Valid for Nigeria’s
Long-Run Growth: A Cointegration Approach. Working paper of African institute of
Applied Economics (AIAE).

Okoh R (2004) Global integration and the growth of Nigeria’s non-oil exports, paper presented
at the African conference, oxford, United Kingdom

Oluwaseyi, A. and Maku, A. (2013) Trade Openness, Foreign Direct Investment and Economic
Growth in Nigeria: A Long-run Analysis; European Journal of Globalization and
Development Research Vol. 7(1) 2013.

DOWNLOAD PDF

---

Back