INTERNATIONAL TRADE EFFECT ON DOMESTIC FINAL CONSUMPTION IN NIGERIA

Abstract

This study is an impact analysis of the impact of international trade on domestic consumption in Nigeria from 1981 to 2021. Trade data were segregated into total trade, oil trade and non-oil trade three of which form the independent variables. Domestic also was disaggregated into total final consumption expenditure (TFCE), final consumption expenditure of household (FCEH), and final consumption expenditure of general government (FCEGG). The three were used as dependent variables. The data were collected from Bank of Nigeria (CBN) statistical bulletin. The data collected were analysis with ordinary least squares multiple regression with the aid of Stata version 15 software. Because of normality problems, the data were transformed using natural logarithm base 10 before analysis. The implication of this is more trade reforms in Nigeria. The three models produced by the analysis, models 7-9, show that total trade has no statistically significant effect TFCE, but oil trade and non-oil trade have significant effects on total final consumption expenditure. Also, the three trade variables do not have any statistically significant effect on (FCEGG) final consumption expenditure of general government. The implication of these is that oil trade exerts most influence on TFCE, FCEH and FCEGG more than non-oil trade. Export instability and commodity concentration are other issues in international trade but were not considered in the analysis and further research incorporating these variables is recommended.