Impact of International Trade on Economic Growth in Nigeria (1988-2012)

Abstract

The study examines the impact of international trade on economic growth in Nigeria, using net export (i.e total export less total import) and Balance of Payment as proxies for international trade while Gross Domestic Product represent economic growth. The study employed regression analysis as the method of analysis using co-integration and error correction modeling techniques to find the long-run relationship between economic performance and international trade. Only Total Export (TEX) remains positive and significant while others remain insignificant, which means, Nigeria is running a monocultural economy where only oil act as the sole support of the economy without tangible support from other sectors such as industrial/manufacturing and agriculture. The government should therefore pursue aggressive diversification of the economy by putting in place policies and incentives that will boost non-oil export, the manufacturing sector and overall promote the industrial growth of Nigeria.