Government Imports and Economic Performance in Nigeria
Abstract
This study examined the effect government imports on economic performance in Nigeria, focusing on both oil and non-oil imports as critical determinants of real gross domestic product (RGDP). Using annual time series data from 1990 to 2024 sourced from the Central Bank of Nigeria Statistical Bulletin and applying an ex post facto research design, the study employs the Augmented Dickey-Fuller (ADF) test, Johansen cointegration test, and Vector Error Correction Model (VECM) to evaluate the long-run and short-run dynamics among the variables. The pre-estimation results reveal that all series are stationary at first difference, while cointegration tests confirm the existence of a long-run relationship between imports and economic performance. The VECM results indicate that oil imports exert a positive and significant effect on RGDP, suggesting that Nigeria’s heavy reliance on petroleum-related imports remains vital to sustaining domestic output. Conversely, non-oil imports show a negative and insignificant effect on RGDP, implying weak linkages with domestic productive capacity. These findings highlight the continued paradox of oil dependence in Nigeria’s trade structure and the underutilization of non-oil imports as drivers of economic diversification. The study recommends strengthening domestic industrial capacity to reduce reliance on oil imports while strategically aligning non-oil imports with growth-enhancing sectors.
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