BALANCE OF TRADE AND ECONOMIC PERFORMANCE: COMPARATIVE ANALYSIS OF NIGERIA AND GHANA

The study empirically analyzed the nexus between balance of trade and economic performance between Nigeria and Ghana between 1981 and 2022, while adopting a comparative economic analysis approach. The study objectively validated the economic influence of balance of payment on the growth and stability of both economies for the period under review. Cross sectional secondary data was implored to address the linear relationship between trade balance and economic performance of both economies, with econometric tools of augmented dickey and fuller test for statistical stationarity being implored to regress for the stationarity and viability of the variables implored in the regression line, while Johansen test for cointegration was used to determine the nature of relationship existing between trade balance and economic stability and sustenance of both Nations. It was empirically obtained that; increasing balance of payment in Nigeria by one percent would boost the economic growth and stability of the nation by 11.1% which is in gross contrast to the Ghanaian economy, where similar gesture only resulted to 9.04% increases on economic growth. It was therefore recommended based on data driven decision coming from the empirical results obtained that, the government of Nigeria should endeavor to develop and implement a workable framework to enhance favorable trade policies, while boosting local content utilization through grass root industrialization strategy and enforcement of import substitution mechanisms. Furthermore, it is recommended on the basis of economic principles, backed with verified empirical facts, that the both economies develop measures to curtail deficit financing and outrageous borrowing over time. The study concludes that, trade is the soul of further economic integration in the twenty first century and the new world order will be charted by producers and not consumers.