Common External Tariff and Household Welfare in Nigeria

Abstract

Economic integration into the global markets offers the opportunity for rapid growth and poverty reduction, particularly in developing countries. It is believed that lowering trade barriers on imported goods provides the consumers with welfare gains, access to better-quality products and lower prices. Therefore, this paper investigated the impact of common external tariff on household welfare in Nigeria within the period of 2005 to 2021. This study is a quantitative research and the data were sourced from World Bank Integrated Trade Solution database, World Bank Commodity Price data and National Bureau of Statistic. The data collected were analyzed using Auto Regressive Distributive Lag (ARDL). The results of the study show that common external tariff are significant and positively impacted on household welfare while tariff changes has significant but negative impact on household welfare. The study, therefore, strongly recommends that all closed borders should be opened in order to discourage smuggling and illegal routes of importing goods while advocating the adoption of Africa’s free trade agreement for better opportunities for export of domestic manufactures