AIR TRANSPORT SERVICES AND TRADE FACILITATION IN NIGERIA

Abstract This study examined the trade facilitation effect of air transport services in Nigeria between 1980 and 2024. Data were sourced from CBN Statistical Bulletin and World Bank Development Indicator. The study employed the Autoregressive Distributed Lag (ARDL) bounds testing approach to test for cointegration, investigate both the long-run equilibrium relationship and short-run dynamic adjustments between air transport services (proxied by air freight volumes and flight frequencies) and trade facilitation implementation, while controlling for gross domestic product, inflation, trade openness, infrastructure development, and infrastructure quality. The bounds test results confirmed the existence of a stable long-run cointegrating relationship, with an F-statistic of 4.020901 exceeding the upper bound critical value of 3.99 at the 1 percent significance level. The long-run results revealed that trade openness exerts a statistically significant positive impact on trade facilitation, indicating that a 1 percent increase in trade openness is associated with a 0.71 percent improvement in trade facilitation implementation. However, the core variable of interest, air transport services, while exhibiting a positive coefficient (2.64E-06), is not statistically significant at conventional levels (p = 0.3355), suggesting that the volume of air transport alone has not been a direct driver of trade facilitation improvements in Nigeria. The short-run error correction results revealed complex dynamic adjustments, with air transport services showing an insignificant contemporaneous effect, a significant negative effect at lag one, and a significant positive effect at lag two, illustrating the delayed and oscillatory nature of the relationship. Infrastructure quality demonstrates the largest immediate impact on trade facilitation, while the error correction term confirmed a moderate speed of adjustment back to long-run equilibrium, with approximately 12.74 percent of disequilibrium corrected annually. The study concluded that air transport-trade facilitation linkages in the Nigeria, showed that air transport services is not a core driver of trade facilitation in Nigeria. The study recommends more financing directed towards air infrastructure in Nigeria. Keywords: Air Transport Services, Trade Facilitation, ARDL Bounds Test, Nigeria, Aviation Infrastructure, Trade Openness