Международный журнал экономики и менеджмента

The Importance of International Trade to the Economies of Developing Countries

Abstract

Nwabueze Prince Okenna

The economic significance and benefits of foreign trade also known as international trade to the economies of developing countries cannot be over emphasized. Its role and

contributions to the gross domestic earnings, employment generation, economic development, and poverty reduction in these underdeveloped countries such as Nigeria,

Ghana, Benin Republic, and others have been too glaring especially in agrarian economies with fertile arable land.The main aim of this paper is to examine in-depth the

contributions and relationship between international trade and economic development of developing African countries.It further recommends that stringent macroeconomic

policies should be formulated that would encourage and increase the multiplier effect of these foreign trades. Part of these policies is targeted towards exchange rates, tariffs,

import and export duties, subsidies, and actions that would promote international trade.The research further concludes that foreign trade is a key macroeconomic driver in

any economy which needs to be encouraged in developing African countries as their multiplier effects have the potentials of driving the needed development goals of these

nations. And for this to be achieved, these nations must come up with workable localized macroeconomic policies that suit and drive their interest as against borrowed

economic policies from the developed European and Asian nations. This study made use of time series secondary data obtained from the World Bank (WDI) and the United

Nations Conference on Trade and Development (UNCTAD) of developing African countries for a period between 2000 and 2019. A forecast of 15 years was also initiated

using these data to provide a long-term insight into the benefits of these trading activities on the GDP of developing countries.