The effect of trade policy reforms on domestic production in Nigeria: Evidence from the Ministry of Trade (2000–2020).
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Background of the Study:
Trade policy reforms in Nigeria have been implemented with the objective of fostering domestic production and reducing reliance on imports. The Ministry of Trade has played a central role in designing and enforcing these reforms, which include tariff adjustments, export promotion initiatives, and import substitution strategies (Ekwueme, 2023). Over the last two decades, such policy measures have sought to create a more competitive local market, encouraging industries to innovate and expand production capacities. By reducing import dependencies and stimulating local manufacturing, these reforms aim to generate employment, enhance technological transfer, and improve the overall balance of trade. However, while some sectors have benefited from these reforms, others continue to struggle due to challenges such as inadequate infrastructure, bureaucratic inefficiencies, and market distortions (Olu, 2024). This study investigates the impact of trade policy reforms on domestic production, assessing the effectiveness of the Ministry of Trade’s initiatives and identifying critical areas where policy adjustments are needed to further boost local production (Nwachukwu, 2025).
Statement of the Problem:
Despite the implementation of trade policy reforms intended to boost domestic production, many Nigerian industries continue to face significant hurdles. Persistent challenges, including regulatory bottlenecks, limited access to capital, and infrastructural deficits, have undermined the potential benefits of these reforms (Ekwueme, 2023). Consequently, domestic production remains lower than anticipated, limiting job creation and economic diversification. This study seeks to identify the factors that hinder effective trade policy reform implementation and to evaluate their impact on domestic production, thereby providing a basis for improved policy strategies (Olu, 2024; Nwachukwu, 2025).
Objectives of the Study:
• To evaluate the impact of trade policy reforms on domestic production in Nigeria.
• To identify challenges affecting the effectiveness of these reforms.
• To propose policy recommendations for enhancing domestic production.
Research Questions:
• How have trade policy reforms influenced domestic production in Nigeria?
• What are the main challenges hindering the success of these reforms?
• What policy measures can further stimulate domestic production?
Research Hypotheses:
• H1: Trade policy reforms significantly enhance domestic production.
• H2: Infrastructural and bureaucratic challenges negatively affect reform outcomes.
• H3: Enhanced policy implementation improves the performance of domestic industries.
Significance of the Study:
This study provides an in-depth analysis of the impact of trade policy reforms on domestic production in Nigeria. Its findings will inform policymakers about the effectiveness of current reforms and highlight areas for improvement to promote self–sufficiency and economic diversification. The study contributes to strategic policy development that fosters robust local industries (Ekwueme, 2023; Olu, 2024).
Scope and Limitations of the Study:
This study is limited to examining trade policy reforms and their effect on domestic production in Nigeria, focusing on initiatives by the Ministry of Trade and related production metrics.
Definitions of Terms:
• Trade Policy Reforms: Adjustments in trade regulations aimed at enhancing domestic production and export performance.
• Domestic Production: The process of producing goods and services within a country.
• Import Substitution: Economic policies that encourage the production of goods domestically to reduce imports.
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