Internal Trade and Unemployment in Nigeria

This paper discusses how internal trade has influenced unemployment in Nigeria between 1980 and 2024 in the context of an increasing phenomenon of joblessness despite the growing domestic trade industry. The study examines the explicit mediating variables of this relationship, which are domestic credit to the private sector, inadequacy of infrastructure and internal insecurity. The research took an ex-post facto research design and used annual time-series data obtained at the National Bureau of Statistics (NBS), the Central Bank of Nigeria (CBN), and the World Bank. To evaluate both the short term dynamics as well as the long term equilibrium relationships, the Autoregressive Distributed Lag (ARDL) model was used. The results affirm that there is a strong co integrating relationship between the variables in the long run. However, in contrast to the theoretical forecast, it was found that domestic credit to the private sector positively and statistically significantly related to unemployment indicating a poor distribution of credit to sectors with high capital-intensive and fewer employment. The impact of internal insecurity was also significant and positive and had a great long-run effect on unemployment supporting the fact that it derailed trade and ruined livelihoods. Although total internal trade and infrastructure expenditure have the anticipated negative coefficients, their relationship with unemployment was statistically significant in the long run meaning that their potential is being suppressed by structural inefficiencies and informality. The conclusion of the study is that unemployment crisis in Nigeria is not just a product of the fact that there is inadequate internal volume of trade but rather a structural and institutional environment in which trade takes place. It also makes policy suggestions, which include reforming credit channels through prioritising labour-intensive SMEs, the vigorous efforts to reduce internal insecurity, and the systematic and focused investments in trade-enabling infrastructure to release the job-creating potential of internal trade in Nigeria.