INTERNATIONAL TRADE AND MACROECONOMIC PERFORMANCE IN NIGERIA

This study investigated the impact of international trade on macroeconomic performance in Nigeria from 1990 to 2023. The research was motivated by the persistent challenges of overdependence on crude oil exports, trade imbalances, and inconsistent policy outcomes that have impeded Nigeria’s economic growth. Anchored on the Heckscher-Ohlin Theory of Factor Endowment and Adam Smith’s Absolute Advantage Theory, the study examined the dynamic relationship between exports, imports, foreign direct investment (FDI), and inflation as they influence Nigeria’s gross domestic product (GDP) growth rate. The study adopted an ex-post facto research design, utilizing secondary data sourced from the World Bank Development Outlook (2024) and the Central Bank of Nigeria Statistical Bulletin (2023). The Autoregressive Distributed Lag (ARDL) bounds testing approach was employed to analyze both short-run and long-run relationships among the variables. The Augmented Dickey-Fuller (ADF) unit root test revealed a mixture of I(0) and I(1) variables, confirming the suitability of the ARDL model. The findings showed evidence of long-run cointegration among international trade indicators and Nigeria’s economic growth. The long-run estimates indicated that exports had a positive and statistically significant effect on GDP growth, while imports exerted a negative and significant impact on GDP growth. Foreign direct investment (FDI) was found to be positive but statistically insignificant. Inflation was negative and statistically significant, suggesting that persistent price instability undermines macroeconomic performance. The study concludes that international trade significantly affects Nigeria’s macroeconomic performance. It recommends diversification of the export base beyond oil, improved local manufacturing capacity, better investment policies to attract productive FDI, and effective inflation management to sustain economic growth and stability