Impact of Trade Openness on Nigeria's Economic Growth (1999-2023)

This study empirically analysed the relationship between trade openness and economic growth in Nigeria from 1999 to 2023. The objectives of the study were to determine the extent to which liberal trade policy affect economic growth, to investigate the relationship between trade openness and economic growth and to examine the impact of total imports of goods and services on export in Nigeria, using annual time series data from 1999 to 2023. The study adopted descriptive statistics; Augmented Dickey Fuller (ADF) unit root test for stationarity, Johansen Cointegration test for long run relationship and Error Correction Mechanism (ECM) model as the methods of estimation. The data for the empirical analysis were sourced from secondary sources like CBN Statistical Bulletin for the period under investigation. The results indicate that a long-run relationship exists between trade openness (volume of export, import and international trade) on economic growth in Nigeria. The findings highlight that trade openness plays a crucial role in Nigeria’s economic development, with exports serving as a key driver of growth, while excessive import dependence hinders progress. The study concludes that trade liberalization policies have positively impacted Nigeria’s economic performance in both the short and long run. Based on these insights, recommendations include enhancing cross-border trade policies, fostering a favorable macroeconomic environment, promoting export expansion, and adopting import substitution strategies to strengthen local industries. These policy measures are essential for achieving sustainable economic growth and resilience in Nigeria’s trade sector.