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Abstract
This study empirically examined the relationship between trade openness, exchange rate and economic growth in Nigeria due to the poor performance of the economy inspite of its implementation of trade openness measures.
The estimation technique for this study employed the Co-integration and Error correction modeling (ECM). Due to the nature of time series data, the study first tested the variables for stationarity (unit root test) using the augmented Dickey Fuller test. Furthermore, a co-integration test was utilized to examine if a long-run meaning relationship exist among the variables before estimating the ECM.
Essentially, the result revealed trade openness impacts negatively on economic growth. The results showed that Nigeria has not adequately benefited from her trade openness probably due to its high import dependent nature. On this note, it was highly recommended that government should put in place quotas and increase tariff-barriers to prevent dumping which arises from trade openness and at the same time effectively reactivate the non-oil export sector to broaden the diversification of the economy’s export sector.
