Abstract
This study investigates specifically the effect of Imports and Exports on Balance of Foreign Trade in Nigeria (GDP). Data were collected for period 2007 – 2016. Multiple Regressions Approach and Correlation Analysis was used, defining Imports, Exports and Openness as independent variables and Gross Domestic Product (GDP) as dependent variable. From the analysis, Imports, Exports and Openness contributes immensely to the Nigeria Gross Domestic Product (GDP). Contrary, Imports is positively and significant on Balance of Foreign Trade in Nigeria (GDP), Exports has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP) and Openness has positively and insignificant on Balance of Foreign Trade in Nigeria (GDP). Also, there is a perfect positive association on gross domestic product between imports on the balance of foreign trade in Nigeria and it is significant, with a perfect positive association on gross domestic product and imports between exports on the balance of foreign trade in Nigeria and it is significant and there is a negative moderate association on gross domestic product, imports and exports between openness on the balance of foreign trade in Nigeria and it is insignificant. This study therefore recommends that Nigeria should enhance her Imports & Exports promotion strategies and expanding the Import sector for easy importation.
Highlights
Foreign trade has become more important to our economy in recent years
Despite the question that whether international trade will lead to higher economic growth is an old question which has been discussed among exports supporters and protectionists with evidences that theorists of both sides have affected policymaking in different countries with different levels of development from the time of Adam Smith, John Stuart Mill, and Keynes up to now (Mehrara et al, 2012), for most Asian countries, since foreign trade plays an important role in their economies, these are worrying times (Economic Intelligence Unit, 2008)
Being dependent on the export of crude oil, the Nigerian economy is subject to the vicissitudes and vagaries of the international oil market such that international oil price shocks will immediately be felt in the domestic economy
Summary
Foreign trade has become more important to our economy in recent years. Exports and imports of goods and services have grown rapidly. The role of trade in promoting industrialization and economic growth cannot be overemphasised This is because, foreign trade provides impetus for industrial development by enlarging market frontiers for domestic industrial output (exports), leading to increased investment, employment, output, and income. Adenugba and Dipo (2013), asserted that when the demand for exports is high more production is required, this creates more employment, raises national income and helps attain a favourable balance of trade and balance of payment position for the exporting economy. This underlines the importance of exports in the growth of an economy. Being dependent on the export of crude oil, the Nigerian economy is subject to the vicissitudes and vagaries of the international oil market such that international oil price shocks will immediately be felt in the domestic economy
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