Abstract:
The benefit of international trade had not been noticed in
the economic growth of Nigeria because some of the goods imported
into the country were those that can cause damages to local industries
by rendering theirs products inferior and being neglected , thereby
reducing the growth rate of output of such industries which later
spread to aggregate economy. The work investigated the extent to which
international trade impacted global economic development with particular reference
to the Nigerian economy between 1986 and 2018. The data employed for this
study are basically annual time series data covering 1986-2018. The data were
obtained from World Bank data outlook, and central bank of Nigeria statistical
bulletin. This study adopts the statistical method of method of multiple linear
regression approach using ordinary least squares to examine the relationship
between RGDP as dependent variable and degree of openness, foreign exchange
rate and interest rate as independent variables. The paper revealed that relationship
exist between international trade and economic growth, and that while some
components of international trade exerted positive and significant effect on growth,
INTR exerted positive but insignificant effect. The result further shows that all
the regressors except interest rate were statistically significance at 5% level of
significance. Some policy recommendations which would be helpful and applicable
to the Nigerian economy were suggested. For the degree of openness, Nigeria
should adopt more policies on trade liberalization like reducing non-tariff barriers,
reducing barriers, eliminating quotas that will enable the economy to grow at a
spectacular rate. The finding with respect to exchange rate implies that the policy
makers should adopt long term policies because in the long run, a strong currency
depends on economic fundamentals. To have a strong exchange rate, countries
will need a combination of low inflation rate, productivity growth, economic and
political stability.
