GLOBAL SUPPLY SHOCKS, FOREIGN TRADE AND INCLUSIVE GROWTH IN NIGERIA, 1995-2025
Keywords:
Global Supply Shocks, Foreign Trade, Inclusive Growth and NARDLAbstract
Every global shock brings a peculiar challenge specially to emerging economies with skewed participation in global trade. Thus, this study is on global supply shocks, foreign trade and inclusive growth in Nigeria between 1995-2025. With focus on how global supply shocks filters through foreign trade to determine inclusive growth in Nigeria through; human development index (HDI), international commodity price index (ICPI), Trade openness (TOP), real effective exchange rate (REER) inflation rate (INFR) and institutional quality index (IQI). Non-linear Autoregressive Distributed Lag (NARDL) model technique was employed for estimation and outcomes indicated that; Nigeria’s macro welfare connection has not been stable within the period of the study (1995-2025). Furthermore, outcome also indicated the absence of a long run relationship between the variables. This implies that; HDI, ICPI (positive/negative), TOP, REER, INFR, and IQI do not share a stable long-run equilibrium over this period of the study. And that shocks resulting from ICPI transmit into inclusive growth (HDI) in Nigeria, mainly through short run asymmetry, instead of through stable long run equilibrium relationship. Based on these outcomes, the study made the following recommendations; the Nigerian authorities should institutionalise counter cyclical fiscal management of commodity windfalls. Break the cycle of fiscal rachet behaviour. And the government should also address the issues surrounding the transmission gap.
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