Could Imports Be Beneficial to Economic Growth in Nigeria?
The study examined the impact of import on economic growth using annual time series data from Nigeria for the period 1981 – 2017. Import was disaggregated into consumer goods, manufactured goods, capital goods, raw materials and refined fuel. The impact of each component was estimated separately using the autoregressive distributed lagged model. The aim was to ascertain the economic growth potential of each component of import. The statistical analysis revealed that there was a change in the import composition of Nigeria during the period under study. In the 1980’s, capital good dominated the import basket of Nigeria, with refined fuel constituting less than 1% of total import. However, in the current period, consumer good and refined fuel is dominant with refined fuel constituting 23% of total import in 2017.The empirical results revealed that importation of capital good is growth enhancing, while importation of refined fuel is a drain on the country’s economic growth process. Importation of consumer goods was found not to be a serious growth enhancing import in Nigeria. Human capital development, money supply and export were found to also have significant impact on economic growth in Nigeria. The impact of government expenditure though significant, negatively affect economic growth in Nigeria. It was therefore recommended that strategic policy framework be put in place to encourage the importation of capital goods, accompanied with serious effort at improving the technical base of the labour force. It was also recommended that local refining of fuel should be a deliberate policy of the government.
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