This study is basically undertaken to take an objective view of the impact of international trade on the economy of Nigeria. Before her political independence in October 1st 1960, Nigeria has been an active player on the field of international trade, initially with predominately agrain products, but presently dominated by petroleum products. Since the discovery of oil in commercial quantity in Oloibiri in the present day Delta State, Nigeria has been an important player in world affairs, economically and otherwise, particularly being the 6th largest producer of crude oil in the organisation of petroleum exporting countries (OPEC). Unfortunately, these blessings by nature to Nigerians didn’t reflect in the overall welfare of the citizen made worse, by the collapse of world oil market as a result of glut in 1981. For example, crude oil prices, which rose rapidly from $20.94 dollars per barrel in 1979 to $36.95 dollars in 1980 and $40.00 dollars in 1981, fell to $29.00 in 1983 and low level of $14.85 in 1986 (Anyanwu, Oyefusi, Oaikhenan, Dimowd 1997). Exchange receipt which rose from $15.7 billion dollars in 1981, fell to $5.2 billion dollars (Anyanwu etal).
The above does not mean that there have been absolutely no gain from Nigeria’s participation in the arena of international trade, the point is that the gains have been normal, not in real terms. Nigeria is suffering from the “Dutch Disease” going by the impact of petroleum on its economy. Because a nation where over 40% of the population live below poverty line, cannot be said to have prospered in real economic terms.
This study is going to take a position, whether Nigeria’s economic under-development can be attributed to international trade or whether her relative economic prosperity, in terms of growth and development can be attributed to her taking part in the field of international trade. In other words, how effectively has trade contributed to Nigeria’s economic growth and development? This is the important question which this study attempts to answer.
STATEMENT OF THE PROBLEM
The importance of international trade in the development process has been of interest to development economists and policy makers alike. Imports and exports are a key part of international trade and the import of capital goods in particular is vital to economic growth. This is so because imported capital goods directly affect investment, which in turn constitutes the motor of economic expansion. Economic reform is expected to affect imports as part of the strategy to restore external balance. However, unless policy makers know what the major components of imports are and how they are determined, such a policy decision can be harmful to investment and output if domestic production relies on imports.
In Nigeria, some people are in favour of protectionist and highly regulated economy and have even criticised the previous Nigerian government, for signing the treaty of the World Trade Organisation (WTO), claiming that, Nigeria was not adequately represented in the negotiations and should push for a fairer deal. As regards to this statement, some people, particularly economists pushed for the implementation of the Structural Adjustment Programme (SAP) in 1986 which brought about deregulation of formerly regulated areas of the economy, so that the country could reap the benefits of economic openness.
The main thrust of this research is to take an objective view regarding the controversy of the role of international trade, in the progress of a country in terms of economic growth of Nigeria. It has been eluded by the dissenting voices in the 21st century that trade could be negative in terms of acting as a catalyst of economic growth and development, being a retrogressive force, in the journey to economic independence. But ironically, past experience has proven the potency of trade as a catalyst of economic progress, with regards to growth and development....