TRADE FLOWS AND ECONOMIC GROWTH NEXUS IN NIGERIA

This study investigates the nexus between trade flows and economic growth in Nigeria, utilizing time series data from 1999 to 2023. Employing a Least Squares regression model, the research examines the impact of trade openness, import tariffs, import quotas, export taxes, and export subsidies on Nigeria's GDP growth rate. The findings reveal a statistically significant positive relationship between trade openness and economic growth, with a coefficient of 3.103851 (p < 0.001). Conversely, import tariffs (-0.016923, p < 0.001), import quotas (-0.102660, p < 0.001), and export taxes (-0.303048, p < 0.001) are found to have a statistically significant negative impact on economic growth. Export subsidies, while positive (0.302470), show a weaker statistical significance (p < 0.05). The model demonstrates a good fit, with an R-squared of 0.737018 and a statistically significant F-statistic (p < 0.001). The Durbin-Watson statistic of 1.893361 suggests the absence of significant autocorrelation. These results indicate that while greater trade openness is beneficial for Nigeria's economic growth, protectionist measures through tariffs and quotas, as well as disincentives for exports via taxes, hinder this growth. Based on these findings, the study recommends policies aimed at further liberalizing trade, reducing import tariffs and quotas, and eliminating or significantly lowering export taxes to foster a more conducive environment for economic expansion in Nigeria. Continued strategic use of export subsidies may also be beneficial, provided their effectiveness is regularly evaluated.