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TRADE OPENNESS AND ITS IMPACT ON NIGERIA’S NON-OIL INDUSTRIAL SECTOR: 1979-2009

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Author(s): Bakare A.S Ph.D | Fawehinmi, F. O

Journal: Economics and Finance Review
ISSN 2047-0401

Volume: 1;
Issue: 5;
Start page: 57;
Date: 2011;
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Keywords: Trade openness | Non-Oil Industrial Sector | direct public investment | industrial growth and International Monetary Fund (IMF).

ABSTRACT
The growth of the industrial sector and the resultant export witnessed in Nigeria in the 1960s and 1970s was largely the outcome of a policy of import substitution which precipitated the overvaluation of the domestic currency partly through the encouragement of low return investments by preferential credit policies and direct public investment in industrial ventures. The ‘fait accompli’ adoption of the IMF – induced structural economic reforms whose main trust is trade openness among others was targeted at restructuring the economy away from over dependence on the oil sector. This study focused on the impact of trade openness on Nigeria’s industrial performance with a view to determining the spill over effect of the policy on the major contending sectors in the economy. This study therefore examined the relationship between trade openness and industrial performance,armed with secondary time series data and using an ordinary least square multiple regression analytical method. The study found that the unilateral trade openness of 1986 produced the sustainable impact on the nonoil industrial sector of the Nigerian economy. It was observed that Public domestic investment, saving rate, capacity utilization and infrastructure has negative impacts on Nigeria’s industrial performance. Our findings and conclusion support the need for the government to consolidate and maintain the credibility of the trade policies for sustainable growth and development. More progress will be achieved if the conditions needed for a deregulated trade system to work properly are set in place.
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