ABSTRACT

 In Nigeria. despite the implementation of trade liberalization measures and despite the persistent signs of economic recovery as seen from reduction in external debt and debt service payments, some macroeconomic pointers shows poor performances of the overall economy and is against this backdrop, this study investigated the effect of trade liberalization and trade inflows in Nigeria covering the period 1981-2018 with specific objectives. The specified model was estimated using the ARDL Model and Granger Causality test which were used to determine the level of impact that one variable had on the other as well as the direction of causality between them. The study establishes that for the period under review, Trade Openness (TOP) had a negative relationship with economic growth in the current year in the short run and was also an insignificant contributor to economic growth in the long run, Import tariff (IMPTR) positively contributes to the growth of the Nigeria economy in the current year, Import Volume Index (IMPVID) had a negative relationship with RGDP for the current year and one year lag period and also had an insignificant impact on economic growth of Nigeria in the long run, Foreign Direct Investment (FDI) had a positive relationship with RGDP in the current year but statistically insignificant at 5% level of significance ail hough showed to be a strong conlrihuwr to RGDP as evidenced in the previous year's lags in the short run while Trade openness and RGDP had a Non-Directional Causality. Based on this findings, the study made gave some recommendations such as that the Government should encourage import liberalization through reduction in tariff rates, gradual removal of Non-Tariff Barriers (NTB), outright banning of certain goods which will ensure that our imports, following trade liberalization, directed mainly on intermediate and capital goods. Imports of consumables would he brought to nil and therefore there would be a corresponding increase in the production of competitive import.