Balance of payments and policies that affects its positioning in Nigeria

This study examines balance of payments (BOP) and policies that affects its position in Nigerian economy. The tariff, non- tariff and exchange rate policies were used as policies that affects the BOP. Various Proxies were used to explain the effect of these policies on the BOP. These includes; the indirect tax as a proxy for tariff policies, the money supply, export and interest rate as a proxy for non- tariff policies, and the exchange rate. This study employs the ordinary least square (OLS) methods of estimation and the heteroscedasticity and autocorrelation covariance (HAC) in order to avoid spurious regression results. The E-views 6.0 was employed in the regression analysis. In executing this study, the ADF (augumented dickey fuller) test and the Unit Root Test was carried out to test the stationarity of the variables. The result shows that the indirect tax, export and exchange rate satisfy the economic apriori expectation while the interest rate and money supply negates the apriori expectation. Using the t-test, it is revealed that only three (3) variables are significant in the explanation of the dependent variable (BOP) while the remaining two variables are insignificant. Recommendations are made to ensure that the balance of payments disequilibrium is resolved.