Impact Of Trade Policies On Economic Development: The Nigeria Experience, 1980 -2018
Richard C Osadume Ph.D FCA
Nigeria Maritime University, Okerenkoko, Nigeria
Sunday D Daniels
Nigeria Maritime University, Okerenkoko, Nigeria
Keywords: International trade, Trade policies, Terms of Trade, Economic development
Abstract
This paper examines the impact of trade policies on economic development, using the Nigeria experience from 1980 to 2018. Theoretical foundation for this studies holds that trade specialization leads to increase in trade and economic development. Empirical evidences however, disagree on this proposition. This investigation attempts to resolve this inconclusiveness. This study uses secondary data form united nations report, Central Bank’s statistical bulletin and the national bureau of statistics to test the impact of the independent variables namely import, export, exchange rate and inflation rate on the dependent variable – Economic development proxy by human development index. The statistical techniques used include selected diagnostics tests, ordinary least square regression, co-integration and impulse response techniques and tested at the 5% level of significance. The result of the study shows that import trade policies, exchange rate and inflation rate have a significant impact on economic development in the short and long-run periods while export trade was statistically insignificant in both short and long-run period with a significant impact response. We conclude that trade policies have significant impact on economic development and recommend the creation of trade-friendly environment and policies that will encourage domestic trade and SME growth; we admonish the government to embark on serious export diversification of the economy to develop and grow our agricultural base for exports and earn quantum foreign exchange, reduce unemployment and poverty; we advise further that the government block the various foreign exchange leakages from the economy ranging from the huge petroleum product importation activities to large scale corruption