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| Title: | Impact of Trade Policy Measures and Interest Rate on Private Domestic Investment in Nigeria |
| Author(s): | AKIDI V., COOKEY I. F. & BARINEME F. S. E |
| Abstract: | This study empirically examined the effect of trade policy measures and interest rate on private domestic investment in Nigeria for period 1990 to 2023. Trade policy measures and interest rate employed are trade openness, import duties, anti-dumping duties, quotas and real interest rate while private domestic investment is captured as real private domestic investment. Data used are annual time series in nature, which were sourced from the Nigerian apex financial institution’s statistical bulletin, world development indicators of the world bank, World Trade Organization (WTO), as well as national bureau of statistics (NBS). The long-run and short-run dynamic autoregressive distributive lag (ARDL) process for data estimation was applied. The outcomes of the study showed that trade openness and import duties had positive and significant effects on real private domestic investment in Nigeria, anti-dumping duties had non-significant positive effect on real private domestic investment, quotas had negative and non-significant effect on the regress and while real interest rate had negative and significant effects on real private domestic investment in Nigeria. Based on the results, conclusion is drawn that trade policy measures contribute significantly in promoting private domestic investment in Nigeria while increase in high interest rate repels private domestic investment. It is recommended among others that government should implement a phased reduction of import duties on capital goods and industrial inputs while maintaining moderate protection for infant industries through temporary tariffs. This will balance trade openness with domestic industry development needs. |
| Keywords: | Trade Policy, Interest Rate Private Domestic Investment, Autoregressive Distributive Lag, |
| Journal: | Journal of World Economics and Financial Report Vol 2 No 1 |
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