IMPACT OF TRADE OPENNESS AND MACROECONOMIC STABILITY ON TOURISM DEMAND IN NIGERIA

Abstract

This paper examines how trade openness and macroeconomic stability influence tourism demand in Nigeria between the years 2000 and 2024 using annual time-series data obtained from Central Bank of Nigeria. The results have shown that total imports have a positive and significant effect on the demand of tourism, which increases the supply of goods and services that attract local and foreign tourists. On the contrary, the impact of total exports on the demand of tourism is negative which implies that the high level of export business would be a disadvantage to the growth of domestic tourism since it would lead to diversion of resources. Tourism demand is negatively correlated with inflation but the relationship is not significant, which means that it does not have much direct influence over tourism during the review period. The conclusion of the study is that the trade openness especially by imports is essential in stimulating tourism demand whereas inflation plays a smaller role. The recommendations on the policy include the need to increase tourism support that involves imports and the need to balance the tourism promotion with export strategies as well as the need to maintain stable macroeconomic factors to promote tourism in the country.