ABSTRACT

The study investigated the effect of trade liberalization on manufacturing value added in Nigeria for the period 1981-2018 with specific objectives namely; lo determine the impact of trade openness on manufacturing value added, to determine the impact of lending Interest rate on Manufacturing Value Added in Nigeria, to determine the impact of official exchange rate on Manufacturing Value Added in Nigeria and to determine the direction of causality between trade openness and Manufacturing Value Added in Nigeria. The specified model was estimated using the Autoregressive Distributive lag Model to determine the level of impact that one variable has on the other. While E-views 10 statistical software was employed in computing the result, time series data were obtained from World Bank national accounts data and OECD National Accounts data files and the study indicated that Lending interest rate had a negative relationship with manufacturing value added in long run and also was statistically significant at 5% level of significance, Trade openness had a positive co-efficient with manufacturing value in the short run and in the long run at 5% level of significance, Official exchange rate has a negative relationship with manufacturing value in the long run and was statistically insignificant at 5% level of significance while the direction of causality between trade liberalization and manufacturing value added was a Uni-directional causality. Based on the findings, the study recommended that the current Trade liberalization policy should be sustained, but must be fortified with control mechanisms to ensure zero tolerance for corrupt practices (corruption proof). This will eliminate or at least reduce to the barest minimum the rate at which fake, inferior and sub-standard goods, that are of no value in their countries of make, are exchanged for our hard earned foreign exchange. Such policies should incorporate severe sanctions for the economic saboteur.