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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

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