Effect of trade openness on economic growth in Nigeria

Abstract

The study investigated the effect of trade openness on economic growth in Nigeria. Time series data were collected from the Central Bank of Nigeria Statistical Bulletin from 1990 - 2022. While balance of payment was the proxy for economic growth (the dependent variable); the proxies for the independent variable (trade openness) were import, export and broad money supply to act as control variable. The method of data analysis employed in this study includes descriptive statistics, correlation analysis and unit root test. Ordinary Least Square was used to estimate the model. The findings revealed that import has no significant effect on balance of payment; export has significant effect on balance of payment; while broad money supply has insignificant effect on balance of payment in Nigeria. The study recommends that government should encourage huge investment on infrastructure development in order generate more economic activities; reduce the cost of doing business and increase the factors that drive productivity in Nigeria; and ensure stability in the interest, exchange rate and other monetary policy tools.