International Trade Policy Indicators and Economic Performance in Nigeria

This study investigates the empirical relationship between international trade policy indicators and macroeconomic performance in Nigeria over the period 1990–2023, using real gross domestic product (GDP) as the indicator of macroeconomic performance. The analysis employs the export diversification index, tariffs, quotas, and trade openness as explanatory variables, with data sourced from the World Development Indicators (WDI) and the Central Bank of Nigeria (CBN). The methodology includes descriptive statistics, unit root tests, the ARDL bounds cointegration test, ARDL estimation, and residual diagnostic tests. Results from the Augmented Dickey–Fuller (ADF) test reveal a mix of I(0) and I(1) variables, while the ARDL bounds test confirms a long run equilibrium relationship between real GDP and the independent variables. The ARDL long run estimates show that the export diversification index has no statistically significant positive impact on real GDP. Quotas exhibit a negative but not significant effect on real GDP. Tariffs have a statistically significant negative impact on real GDP, whereas trade openness has a positive but not statistically significant effect on real GDP. Based on these findings, this study recommends among others that tariff policies should be selectively adjusted to protect strategic infant industries while avoiding excessive protectionism that hinders trade efficiency and economic growth.