Trade Liberalization and Manufacturing Sector Performance in Nigeria

This study examined the impact of trade liberalization on manufacturing sector performance in Nigeria from 1970 to 2018. A multiple regression model was developed to achieve the study’s objectives with real manufacturing growth rate (RMGR) as proxy for manufacturing sector performance. Import penetration, export penetration, dummy variable for structural adjustment programme alongside other control variables were used. Using the Autoregressive Distributed Lag (ARDL) bound testing for cointegration approach, it was found that all the variables for the model had long run relationship. Furthermore, the ARDL results revealed a mixed impact of trade liberalization on the performance of the manufacturing sector. Specifically, while trade liberalization exerted insignificant positive impact on RMGR in the short run, the impact was positive and statistically significant in the long run. Consequently, the study recommended policies that would encourage the importation of capital goods to enhance manufacturing productivity in Nigeria.