IMPACT OF TRADE TARIFFS ON THE MANUFACTURING SECTOR IN NIGERIA (1993-2023)

ABSTRACT This study investigates the impact of trade tariffs on Nigeria’s manufacturing sector between 2008 and 2023. Using annual secondary data drawn from the Central Bank of Nigeria, the National Bureau of Statistics and international trade sources, the paper examines the relationships among manufacturing output, weighted-average tariff rates, official and parallel NGN/USD exchange rates, and inflation. The study employed descriptive analysis which maps trends of over 16years, while econometric analysis, Ordinary Least Squares Regression and Granger causality tests are used to quantify relationships and explore directionality. Empirical results show that, holding other factors constant, higher tariff protection is associated with higher measured manufacturing output: the tariff coefficient is positive and statistically significant (p < 0.05). Official and parallel exchange rates, by contrast, do not emerge as significant predictors in the baseline OLS model. The Granger causality test suggests a short run lead from tariffs to manufacturing performance. The model explains a substantial share of output variation (R² ≈ 0.63) but displays signs of serial correlation, underlining the limits of the specification and the influence of unmodeled dynamics. The findings suggest that moderate, well-targeted tariff protection coupled with exchange-rate stability and infrastructure investment, can support domestic manufacturing. The paper concludes with policy recommendations to combine temporary protection for nascent industries with measures that improve foreign exchange access, reduce smuggling, and address structural bottlenecks. Limitations and avenues for further research are noted.