A multi-sectoral balance of payments constrained growth approach with intermediate imports: The case of Nigeria

This study seeks to ascertain whether the Multi-Sectoral Balance of Payments Constrained Growth model is suitable to explain Nigeria's growth experience from 1981 to 2018. The paper explicitly incorporates the effects of intermediate imports and relative prices into the analysis. We employ the autoregressive distributed lag econometric procedure for the analysis. The outcome of the study shows that the MultiSectoral Balance of Payments Constrained Growth model correctly predicts Nigeria's growth path. It was found that manufactured export is one of the main determinants of the intermediate import demand function. Considerable reliance on this type of import to produce final exports could reduce the gains from trade, thus adversely affecting the GDP growth of the economy compatible with the BoP constrained growth model in the long run. (c) 2020 Elsevier B.V. All rights reserved.