An Empirical Analysis of Trade Protection and the Nigerian Economy

This study employs Autoregressive Distributed Lag (ARDL) modeling in analyzing the co-integration relationship between trade protectionism policy and economic growth in Nigeria from 1988 to 2022.The study made use of annual time series data, sourced from the Central Bank of Nigeria Statistical bulletin. The findings of the study revealed that GDP per capita has significant positive impacts on tariff rate in the short run, tariff rate and industry productivity were also seen to have a positive and significant relationship, Whereas the coefficient of unemployment indicated a negative but statistically insignificant relationship. However, the coefficients of its lagged values were all positive and statistically significant. This suggests that higher unemployment rates in previous periods are associated with higher tariff rates. The findings in long run on the other hand, highlighted the complex relationship between trade protectionism and economic growth in Nigeria. In that higher industry productivity was associated with higher tariff rates, lower unemployment rates were also linked to higher tariff rates. While trade net outflow was seen to be statistically insignificant. implying that changes in trade net outflow may not have a significant long-term impact on the tariff rate. Both findings therefore suggests that trade protectionism in Nigeria has not been effective as a strategy for fostering sustained economic growth. Rather than promoting long-term competitiveness and efficiency, protectionist measures appear to respond to short-term economic pressures and political considerations, particularly related to employment and industry interests. Consequently, for trade policy to contribute meaningfully to economic growth, Nigerian policymakers should adopt a more balanced approach one that minimizes excessive protection while supporting productivity-enhancing reforms, encouraging competition, and integrating the economy more effectively into global markets.