Towards Attaining Sustainable Growth in Nigeria: Dynamic Effects of Financial Liberalization and Trade Openness, 1980-2023

The paper analyses how financial liberalization and trade dynamics influenced the economic performance of the Nigerian economy. The analysis covers data of 44 years (1980-2023) elicited from secondary sources. The data were analyzed using the Autoregressive Distributed Lag (ARDL) technique, since it adequately captures data with differing levels of stationarity. The empirical findings demonstrated that financial liberalization at the long run have positive and significant nexus with the economic growth in Nigeria. The ratio between money supply and GDP is positive and it is insignificant both terms. The significance of private sector credit (β = 0.415, p < 0.001) and foreign direct investment (β = 0.327, p < 0.005) is positive in boosting the long run economic growth. The adverse impact of short run trade openness is indicative of dependence on imports in Nigeria. On the basis of these results, it was inferred that, to a large degree, financial liberalization can contribute greatly to the economic growth in the long run in the Nigerian economy. Thus, it was suggested that there is need to encourage export diversification to counter the adverse impacts of net exports. Moreover, Nigeria should provide an enabling atmosphere that can promote trade by investment inflow that will unleash growth.