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. 11 NO. 2 2025
DOI: 10.56201/ijebm.vol.11.no2.2025.pg120.148

---

Trade Liberalization and Nigeria Economic Growth: The Post Structural Adjustment Programme

Ozuzu Chukwemeka Sydney Reginald PhD, Amadi Rose Clesestine PhD, Young Geoffrey Nwala

---

Abstract

This study examined the effect of trade liberalization on Nigeria economic growth. The objective of the study was to study the effect of trade liberalization on Nigeria economic growth. Time series data was sourced from Central Bank of Nigeria Statistical Bulletin from 1990-2023. Real gross domestic product was modeled as the function of trade openness, exchange rate and balance of payment. The study employed multiple regression models to estimate the effect of trade liberalization on Nigeria economic growth. The null Hypotheses (H0) were tested at 0.05 level of significance, Ordinary Least Square (OLS), Augmented Dickey Fuller Test, Johansen Co- integration test, normalized co-integrating equations, parsimonious vector error correction model and pair-wise causality tests were used to conduct the investigations and analysis. The study found that 69% variations in the dependent variable could be trace to variation in the model; this is again justified by the f statistics and the probability value. the study also found that the variables can adjust at the speed of 34.5 percent annually while the parameters of the variables shows that trade openness and balance of payment have positive and significant effect while exchange rate have positive but no significant effect Nigeria economic growth. From the findings, the study conclude that trade liberalization have positive effect on Nigeria economic growth. The study recommends that government should formulate policies that will enhance both domestic and foreign trade to foster global integration and competition since it has been established that there is a relationship between degree of openness and volume of trade and economic growth. Policymakers of the government should balance its strategies of trade liberalization as a result of the inability of the economy to absorb the adverse shocks from foreign trade, appropriate fiscal and monetary policies should be deployed by the gove

keywords:

Trade Liberalization, Nigeria Economic Growth, Post Structural Adjustment

---

References:

Aboubacar, B., Xu, D., & Ousseini, A. M. (2014). Does trade openness matter for economic
growth in Niger? Theoretical Economics Letters, 4(09), 916-927.
Aboubacar, B., Xu, D., & Ousseini, A. M. (2014). Does trade openness matter for economic
growth in Niger? Theoretical Economics Letters, 4(09), 916-927.
Adhikary, B. K. (2011). FDI, trade openness, capital formation, and economic growth in
Bangladesh: A linkage analysis. International Journal of Business and Management, 6(1),
16-28.
Adjei, M., Yu, B., & Nketiah, E. (2019). The Development and Determinants of Foreign
Exchange Market in Ghana. Open Journal of Business and Management, 7, 1831-1845.
Adu-Gyamfi, G., Nketiah, E., Obuobi, B., & Adjei, M. (2020). Trade Openness, Inflation and
GDP Growth: Panel Data Evidence from Nine (9) West Africa Countries. Open Journal of
Business and Management, 8, 314-328.
Bekele, Y. E. (2017). Exploring the relationship between trade liberalization and Ethiopian
economic growth. MPRA Paper No. 83584.
Bushra, Y., Zainab, J. & Muhammad, A. C. (2014). Trade Liberalization and Economic
Development: Evidence from Pakistan. Journal of Economics, pp.19-34.
Chakraverty, S. & Singh, .A. (2014).The desirable forms of economic openness in the South
Mimeo. Helsinki, WIDER (World Institute for Development Economics Research.
Cheol, S. &, Bruce, G. R. (2013). International financial management China Machine. Chris,
Brooks. (2012). Introductory Econometrics for Finance, Cambridge University Press. The
Edinburg Building, Cambridge. UK.
Dabel, I. (2016). Trade openness and economic growth: Evidence from Ghana. An
Unpublished Master of Philosophy Degree in Economics of the University of Cape Coast.
DeRosa, D.A. (2012). Regional integration arrangements: Static economic theory, Quantitative
findings and policy guidelines. World Bank, Development Research Group, Policy
Research Working Paper No. 2012.
Duru, I. U., & Ehidiamhen, P. O. (2018). Empirical investigation of the impact of export
diversification on economic growth: Evidence from Nigeria, 1980-2016. Journal of
Economics, Management and Trade, 21(7), 1-24.
Duru, I. U., & Ehidiamhen, P. O. (2018). Empirical investigation of the impact of export
diversification on economic growth: Evidence from Nigeria, 1980-2016. Journal of
Economics, Management and Trade, 21(7), 1-24.
Echekoba, F. N., Okonkwo, V. I., & Adigwe, P. K. (2012). Trade liberalization and economic
growth: The Nigerian experience (1971-2012). Journal of Poverty, Investment and
Development, 14(5), 20-35.
Echekoba, F.N, Okonkwo, V.I & Adigwe, P.K. (2015). Trade Liberalization and Economic
Growth: The Nigerian Experience: Journal of Poverty, Investment and Development.
14(4), 51-72.
Edwards, S. (1992). Trade orientation, distortions and growth in developing countries. Journal
of Development Economics, 39(1), 31-57.
George, A. V. (2013). Trade Liberalization and Economic Expansion: A Sensitivity Analysis.
Athens: University of Economics and Business, 71-88.
Harberzar, A. C. (2014). Currency Depreciation, Income and Balance of Trade.Journal of
Political Economy. HR focus 31, 4-7.
Harrison, A. (1996). Openness and growth: A time-series, cross-country analysis for
developing countries. Journal of Development Economics, 48(2), 419-447.
Jeffrey, H. (2015). The Unequal Effects of Liberalization: Theory and Evidence from India.
Harvard University, University College London and CEPR.
Khobai, H., Sanderson, A., & Le Roux, P. (2016). Co-Integration between electricity supply
and economic growth in South Africa. International Journal of Energy Economics and
Policy, 6, 637-645.
Manwa, F. (2015). Impact of trade liberalisation on economic growth: The case of the
Southern African Customs Union (SACU) countries. PhD Thesis, Southern Cross
University, Lismore, NSW.
Mwaba, A. (2013). Trade liberalization and growth: Policy Options for African Countries in a
Global Economy. African Development Bank, Economic research papers No 60.
Newbold, P.(2012). Spurious Regression in Econometrics. Journal of Econometrics, 2(6), .90-
Ngerebo-a, T. A., Nwosi, A. A., & Lucky, A. L. (2016). Exports, imports and economic growth.
A comparative analysis of Nigeria economy (1918-2014). Nigeria Journal of Financial
Research, publication of the Department of Finance and Banking, University of Port
Harcourt, 11(1).
Nketiah, E., Adjei, M., Boamah, B. B., & Adu-Gyamfi, G. (2019). The impact of remittance
on the real exchange rate in Ghana. Open Journal of Business and Management, 7, 1862-
Nketiah, E., Cai, X., Adjei, M., & Boamah, B. B. (2020). Foreign Direct Investment, Trade
Openness and Economic Growth: Evidence from Ghana. Open Journal of Business and
Management, 8, 39-55.
Obioma, O. S. (2012). Trade openness, productivity and economic growth in
Nigeria.University of NigeriaNsukka, Enugu.
Ogujiuba,K.K., Oji, G.O.,& Adenuga (2014). Is trade openness valid for nigeria’s long run
growth: A Co integration Approach A Paper Presented to the USAID-Nigeria.
Osllivan, D. (2013). Trade liberalization and growth: Policy options for African countries in a
global economy. African Development Bank, Economic research papers, N0.89
Pugel , A. T. and Lindert, H. P. (2000). International Economics.(11th Edition). New York,
U.S.A: McGrawHill coy. 9.
Rodrik, D. (2001). Trade policy and economic growth: A sceptic's guide to the cross-national
evidence. In B. Bernanke and K. Rogoff (Eds.), NBER Macroeconomics Annual.
Cambridge, MA: MIT Press.
Rodrik, D., Subramanian, A., & Trebbi, F. (2002). Institutions rule: The primacy of institutions
over geography and integration in economic development. National Bureau of Economic
Research Working Paper Series No. 9305.
Romer,D.(2013). Openness and inflation: Theory and Evidence. Journal of Economics 4(1),
869 – 903. 114
Ude, D. K. and Agodi, J. E. (2015). Does trade openness make sense? Investigation of Nigeria
Trade Policy: International Journal of Academic Research in Economics and Management
Sciences .4(1). 111-126
Wiredu, J., Nketiah, E., & Adjei, M. (2020). The relationship between trade openness, foreign
direct investment and economic growth in West Africa: Static Panel Data Model. Journal
of
Human
Resource
and
Sustainability
Studies,
8,
18-34.

DOWNLOAD PDF

---

Back