PROTECTIONIST TRADE POLICIES: AN EMPIRICAL SURVEY OF THEORY, EVIDENCE AND RATIONALE FOR ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

This study seeks to investigate empirically the survey of theory, evidence and rationale of the impact of
protectionist trade policies on Nigerian economic development, using secondary annual time series data from
1988 to 2024 from the Central Bank of Nigeria Statistical Bulletin, World Development Indicators (WDI) and
World Trade Organization (WTO). The dependent variable is economic development proxied by human
development index (HDI), while tariff rates (TAR), import bans or quotas (QUOTAS), non-tariff barriers (NTB),
trade openness (TOP), foreign direct investment (FDI),government expenditure (GOVEXP), exchange rate
(EXR), and inflation rate (INFL) were the independent and control variables respectively. The test mechanisms
adopted were the unit root test, co-integration test and Autoregressive Distributed Lag (ARDL) technique.
Findings revealed that there is a positive and significant relationship existing between non-tariff barriers
(NTB), trade openness (TOP), foreign direct investment (FDI), exchange rate (EXR), government expenditure
(GOVEXP) and inflation rate (INFL) in both long and short run period, suggesting that these factors of
protectionist trade policies jointly strengthen economic development in Nigeria. However tariff rate (TAR) and
import bans or quotas (QUOTAS) exhibited an expected negative but significant relationship with economic
development in both periods, showing that protectionist trade policies have constrained economic growth by
increasing production costs, discouraging investment, limiting technology transfer, and reducing market
efficiency. Therefore, for policy, the study recommended that government and policy makers should pursue a
balanced trade strategy that emphasizes gradual trade liberalization, export promotion, infrastructure
development, industrial competitiveness, and strategic temporary protection for genuinely infant industries.
Such an approach is more likely to foster sustainable economic development and structural transformation in
Nigeria than broad-based protectionist measures.