Trade Openness and Economic Growth in Nigeria

In today's globalized economies, virtually every country in the world belongs to some form of regional integrated trade organization whether by direct membership, bilateral or multilateral agreement. Regional integration is a process by which sovereign states in a particular region enter into an agreement to promote economic growth through the reduction of barriers to trade restrictions and safeguard common interests such as the environment. The removal of trade barriers results in a free trade zone thus creating a single market. Sovereign nations have many differences, some may be more economically sound and others may have a greater labor force or better technology. In the end,

In this study, panel data for 25 developing countries is used for the years 2000, 2005 and 2010. These countries are listed separately in appendix ‘A’. The World Bank list of developing countries was referred to but data for these three particular years was available for 25 out of 145 countries. All the variables that were used in our model were sourced from the World Bank’s World Development Indicators 2013. The description of variables is given in appendix ‘B’.The descriptive statistics of the variables are presented in appendices ‘C’ and ‘D’.

Nigeria is an Agricultural and oil rich nation but characterised by Political instability, corruption, poor

“This essay will be written on Nigeria during the independence era to the present time of the country. What will be discussed about Nigeria is how they achieved their development, how they are now currently the African continent’s top economy. “The discussion that will be in this essay is the theories used after Independence in Nigeria to obtain development. Nigeria is also known for the country’s population growth; population growth has its advantage which has a positive impact on the country’s economic growth as it causes demand for products and also leads to an upsurge in human a country which is why Nigeria today is leading with their economic growth.” “Nigeria is a country endowed with human, agricultural, petroleum, gas and large untapped mineral resources” Nigeria was once a colonialized country, they managed to obtain their Independence. According to (Babs,1977) Nigeria is mostly likely referred as the “Giant of Africa” because of its population, the country is also culturally diverse and has a large economic growth in Africa.” Nigeria has relatively advanced power, road, rail and ICT networks that cover the national territory quite extensively, Nigeria has a good progress in their infrastructure and sanitation”

Lagos state economy makes up a significant proportion of the Gross Domestic product(GDP) of Nigeria despite its small land size, other states with larger land size do not contribute as much as Lagos State and justifying porters location theory. The burgeoning economy 2010 GDP stood at =N= 12.091 trillion ($80.61 billion) and accounted for 35.6% of the national GDP and 62.3% of national Non - Oil GDP for the same year (Lagos State Gross Domestic Product (GDP) Survey: 2010).Translating the economic benefits of Lagos GDP to the common man in Lagos has remained a herculean task,

Growth, productivity and employment are the most common economic variables to reduce extreme poverty and break poverty trap. Report from World Bank in 2007 revealed that one percent in GDP growth results to 1.3% poverty decline in low-income countries. Moreover, development in the productive capacity leads to reduction in sustainable poverty. With improvement in the economic growth, many people have been removed from poverty during the past few decades in many developing countries. However, poverty continues to be worsening in the 33% of the world's least developing African countries. (African Economic Research Consortium 2008). While there are many factors influencing growth, management of macroeconomic is very crucial to economic growth. Appropriate macroeconomic policies are critical for wealth creation, sustainable economic expansion and employment generating investment. Recent improvement in the economic performances of some African countries was underpinned by the improvement in macroeconomic management. However, inefficient macroeconomic policies are the features of many African countries leading to the substantial growth disparities in the African continent.

Nigeria and Angola are both West African countries plagued by the resource curse. The countries are teeming with oil, ranking Nigeria as Africa’s largest oil producer and Angola as the second largest oil producer. In 2014, it was reported that Nigeria was responsible for producing 2.4 million barrels of oil per day and Angola produced 1.8 million barrels of oil per day. While these numbers have fluctuated greatly in the past, both countries still remain at the top as Africa’s oil producers (Carpenter; Ajayi). The production of oil in Nigeria and Angola has brought in a great deal of profit to both countries, however, it has also come along with a number of complications. As Ajayi writes, “fuel abundance in less developed countries tends to

The volatility in the prices of crude oil in the international oil market which was triggered by factors within the global economy has impacted the Nigeria economy to some degree with dire consequences for the implementation of the 2012 budget. Some of the factors which triggered the fall in oil prices include a massive liquidation of net-long speculative positions, a deepening Euro-zone crisis as well as concerns over a weakening economic outlook, steady rise in global crude stocks, weak US jobs data, and a slowdown in Chinese manufacturing activity.

Nigeria has a population of around 180 million, making it the most populous country in Africa. Nigeria is located in a region with tropical climate and that can grow variety of crops. With their numerous resources and growing technology they have been able to have positive economic advancement. Nigeria has had improvements in five of the ten economic freedoms. This includes Freedom of corruption, labor freedom, and management of government spending ("Nigeria." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption.). Nevertheless these large improvements in their economy has not brought human development, where most Nigerians live under the poverty line. This paper will focus on why Nigeria has not been able to use their economic prosperity in the sector of human development, this includes standard of living, health, safety, and basic necessity one needs to live a stable life. We will compare it to the state of Ghana whose economy has also flourished but has been success in human development.

The potentials of capital market in Nigeria as a catalyst to economic and industrial development cannot be over emphasized. The capital market as an internal part of a country’s financial system operates at the long end of the system to mobilize resources for long term development and growth. Basically, the capital market accelerates growth by providing ,relatively long term capital - debt and equity finance – for government and corporate sector.

Nigeria has a current GDP of 568.5 billion and a population of 178.5 million. It is the largest country in Africa with approximately 47% of West Africa’s population. It is the main oil exporter in the continent, has around 44 solid minerals in commercial quantity, and is a leading global player in a variety of commodities. Neoclassical Exogenous Growth theory argues that technology enables persistent increase in growth rate. Neoclassical Endogenous Growth argues growth comes by investing in key areas such as education, R&D, skills and knowledge. Both explain why Nigeria should be able to build a prosperous economy, reduce poverty and create wealth once investments are shifted to key areas and technology is imported and implemented. To attract capitals, including foreign direct investments, Nigeria will focus on developing the manufacturing sector (World Bank, 2014).

There are several authors that put emphasis on the role of international trade as the main conduit of economic development. Influential papers in this school include Sach and Warner (1995), Frankel and Romer (1999), and Dollar and Kraay (2003). In these papers, trade strongly fosters economic convergence among countries and regions.

During 2003-2007, Nigeria attempted to implement an Economic Empowerment Development Strategy (NEEDS). The purpose of NEEDS is to raise the country’s standard of living through a variety of reforms, including macroeconomic stability, deregulation,

One of the outstanding elements of macroeconomics is Gross Domestic Product (GDP). In the last five decades this element has been embraced as an acceptable meter for economic growth (Robert Constanza, 2009) and remains the best indicator of standard of living of a country. Ghana, a developing country west of sub-Saharan Africa is not in isolation and different from others. It is an undeniable truth that Ghana?s economy has not grown much since the early 1960s after her independence (Aryeetey, 2000). Over the years, Ghana 's economic growth has been pegged at 3% to 4% (Institute of Economic Affairs , 2006). However, in 2011, Ghana recorded a high Gross Domestic Product growth of about 14.5.0% (Data.worldbank.org, 2016). Nevertheless, this growth has not been sustained over the subsequent years. Gross Domestic Product growth has been 4%, 8%, 15%, 7.9%, 5.4% and 4.2% for consecutive years from 2009 to 2014 respectively (IMF, 2015).. From the statistics, it is very evident that GDP growth in Ghana has been undulating. The statistics can be ascribed to the financial contributions that various sectors such as the real sector with services inclusive, the external sector and the monetary sector make to the economy. Notwithstanding this, over the years, the major contributor to Ghana?s economy has been the service sector (Ghana Statistical Service, 2013; Ghana Statistical Service, 2012) about 50.2% of total real sector contribution to the GDP (Budget, 2015)

Economic growth of countries has always been a topic of research interest. Whether the country is developed, developing or least developed, economic researchers tried to find the reason behind economic growth or the lack of it. With many other factors contributing towards economic growth, international trade was also found beneficial for both trading countries according to Edwards (1993). Today, when the world is becoming a global village, the importance and benefits of international trade cannot be ignored.