Trade Openness and Economic Growth (A Comparative Study Between Nigeria and Ghana)

Samuel Ngbede Ehoda, Deborah Enecheojo Onoja, Edumaretola Gabriel Adefioye and Anthony Ekpang Bisong
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Samuel Ngbede Ehoda: Department of Economics, Federal University Lafia, Nasarawa State, Nigeria
Deborah Enecheojo Onoja: Department of Economics, Benue State University, Makurdi, Benue State
Edumaretola Gabriel Adefioye: Department of Economics, Federal University Lafia, Nasarawa State, Nigeria
Anthony Ekpang Bisong: Department of Economics, Federal University Lafia, Nasarawa State, Nigeria

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 7, 84-93

Abstract: This study examines the impact of trade openness on economic growth in Nigeria and Ghana covering the period of SAP and POST-SAP from 1986-2016. The study made use of the following theories; Comparative Cost Advantage Theory and Endogenous Growth Model (New Growth Theory). Secondary data were sourced from OECD/World Bank Statistical Publications, CBN Statistical Bulletin, Nigerian Bureau of Statistics and other research publications on the following variables; RGDP which is the dependent variable is used as a proxy for economic growth while TOP, GFCF, FDI and EXR are the explanatory variables. Both descriptive and econometrical techniques such as Unit Root Test and ARDL Bounds Test were employed. The Unit root test reveals that all variables were stationary at first difference while ARDL Bounds test indicated a long-run relationship among the variables. From the findings of this study, trade openness has an insignificant positive relationship on economic growth in Nigeria and Ghana under the period of study. This research work therefore recommends that policies of exchange rate stability and structural trade oriented policies should be adopted in Nigeria and Ghana in order to boost output growth in the economy. In addition, the Ghanaian government needs to invest heavily on infrastructural development and transport related cost. Finally, the government of both economies should create an investment friendly environment and also restructure its financial market so as to propel FDI in the economy.

Date: 2022
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