The Impact of Trade Openness and Average Tariff Rates on Economic Growth in Nigeria: An Empirical Analysis (1986–2025)
Year: 2026
Type: article
Abstract: This study investigated the impact of trade openness and average tariff rates on economic growth in Nigeria from 1986 to 2025. The main objective of the study was to examine the extent to which trade openness and tariff policies influence economic growth in Nigeria within the period under review. The study covered annual time series data from 1986–2025 and adopted an ex post facto research design because the study relied on already existing macroeconomic data obtained from the Central Bank of Nigeria Statistical Bulletin, World Development Indicators, and other relevant sources. The study employed Real Gross Domestic Product (RGDP) as the dependent variable, while Trade Openness (TROP) and Average Tariff Rates (TARFS) served as explanatory variables. The methodology adopted included descriptive statistics, Augmented Dickey-Fuller (ADF) unit root test, Johansen cointegration test, Vector Error Correction Mechanism (VECM), impulse response analysis, variance decomposition, and Block Exogeneity Wald Test. The theoretical framework of the study was anchored on the Classical Theory of International Trade, Heckscher–Ohlin Theory, and Krugman’s Theory of Trade Liberalization. The findings revealed that trade openness and average tariff rates maintained positive long-run relationships with economic growth in Nigeria, although their short-run effects were statistically weak. The study concluded that trade liberalization contributes positively to economic growth when supported by stable macroeconomic and institutional policies. Therefore, the study recommended the implementation of stable trade policies, export diversification, and improved domestic productive capacity in Nigeria.
DOI: 10.46654/pcte1b88
Institution: Nasarawa State University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7166545895