Pattern of Trade and Sustained Industrialisation in Nigeria

Abstract

This study investigates the nexus between Nigeria’s pattern of trade and sustained industrialisation over the period 1981-2024. Motivated by persistent industrial stagnation despite decades of trade liberalisation, it explores how changes in bilateral trade structure and overall trade diversification shape both the long-run and short-run dynamics of industrial development. Anchored in the comparative advantage and structuralist theoretical frameworks, the study employs an ex post facto research design and the autoregressive distributed lag (ARDL) estimation technique. Using annual secondary data from WDI, UNCTADstat, UN Comtrade, and UNIDO, the analysis covers 1981 and 2024. Empirical findings reveal that export diversification (β = 0.486; z = 3.83; P>z = 0.001), bilateral manufactured exports (β = 0.372; z = 2.94; P>z = 0.006), and non-oil export intensity (β = 0.329; z = 2.72; P>z = 0.010) exert strong, positive, and statistically significant effects on sustained industrialisation. Conversely, import competition (β = −0.274; z = −2.69; P>z = 0.011) and import penetration (β = −0.216; z = −2.42; P>z = 0.019) have negative impacts, while institutional quality and infrastructure (β = 0.298; z = 2.11; P>z = 0.042) moderately enhance industrial resilience. The study concludes that sustained industrialisation in Nigeria depends critically on a diversified, value-added trade structure integrated into high-productivity sectors. It recommends strengthening export diversification and manufacturing clusters, improving infrastructure and governance, and promoting technology transfer through targeted FDI.