DRIVERS OF INTERNATIONAL TRADE AND PRIVATE SECTOR INVESTMENT IN NIGERIA

Abstract

The private sector is a major contributor to national income, serving as a key driver of job creation and the delivery of essential goods and services. However, the sector has yet to reach its full potential in Nigeria. This study investigates the key drivers of international trade to assess their impact on private sector growth in Nigeria. The Ordinary Least Squares (OLS) technique was employed for the analysis. Secondary data spanning the period from 1981 to 2021 were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin, National Bureau of Statistics (NBS) annual reports, and the World Bank Databank. The findings revealed that export trade has a positive and significant impact on private sector investment in Nigeria, while import trade exerts a negative but significant impact. Conversely, research and development, as well as the human capital index, were found to have no significant impact on private sector investment. The study recommends that the Nigerian government should fully embrace the African Continental Free Trade Area (AfCFTA) to enhance its export capacity and strengthen intra-African trade competitiveness.