International Trade and Industrial Sector Productivity in Nigeria
Osuji, J. I.
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This study investigated the effects of international trade on industrial sector productivity in Nigeria. The main objective was to assess the nature and effects of Nigeria‘s international trade variables on the country‘s industrial sector productivity index, with specific attention to manufacturing and mining; for the period 1986 to 2016. The study made use of secondary and primary data for its investigation. Econometric tools of linear regression, autoregressive distributed lagged (ARDL) regression, cointegration test and logistic regression were employed for data analysis. The study developed some models which can be used to predict relationship between international trade variables and industrial (manufacturing and mining) sector productivity such as Y1= 150.73 -0.0051*X1-0.0228*X2 which was developed, for predicting Nigeria‘s industrial sector productivity (Y1) based on variations in her international trade variables of oil export (X1) and non-oil export (X2).The study among others found that in Nigeria, oil export has significant effect on industrial sector productivity. While it has positive effect on mining activities, the effect on manufacturing is negative. On the other hand, the effects on non-oil export, oil imports, non-oil imports, expert services and exchange rate on industrial and manufacturing sector productivity are all negative and significant. Equally, degree of trade openness showed no significant relationship with manufacturing sector productivity. The study established that low level of export of expert services, due to poor intellectual capacity and technical knowhow is major reason why Nigeria has not been able to exploit opportunities open to her in the international trade market. Based on the above findings the study concluded that, problems of low productivity, weak industrial base and high import- dependency ratio of the industrial sector in Nigeria, are caused by the non-oil international trading activities of Nigeria, given its negative and significant effects as identified by this study. Also, that enhancing industrial productivity is a necessary requirement for Nigeria‘s favourable participation in international trade. The study therefore recommended, among others that, government should formulate appropriate policies, programmes and projects that will promote industrialization of the non-oil sector as an integral part of national industrial development strategy. This will enable the country enhance her industrial sector productivity; thereby improving overall participation and competitiveness in delivery of valued-added goods and services through international trade.