Interdisciplinary Journal of African and Asian Studies (IJAAS), Volume 6 No. 2, 2020 Musa 185 IMPACT OF TRADE OPENNESS AND EXCHANGE RATE VOLATILITY ON ECONOMIC GROWTH IN NIGERIA Musa, Nuhu (Ph.D) Department of Economics, Kogi State University, Anyigba, Nigeria Email: musanuhuadams@gmail.com Abstract This paper investigated the impact of trade openness and exchange rate volatility on economic growth in Nigeria for the period 1986-2019. The main objective of the study was to investigate the effect of trade openness and exchange rate volatility on economic growth in Nigeria. To achieve the objective, the generalized autoregressive conditional heteroskedasticity (GARCH) and autoregressive distributed lag (ARDL) model were employed for the analysis. The study used annual time series data sourced from CBN Statistical Bulletin and National Bureau of Statistics for the period under investigation. The variables employed for the study include GDP growth rate used as proxy for economic growth which served as the dependent variable while trade openness, real exchange rate, foreign direct investment and inflation rate were used as the independent variables. Results from ARDL model showed that trade openness had negative and significant relationship with Nigeria’s economic growth both in the short-run and long-run. The results from the GARCH model indicated the presence of volatility in the real exchange rate of naira with its attendant implications on the Nigerian economy. Based on the findings, the study recommended that the Central Bank of Nigeria should stabilize the exchange rate of naira by controlling the high demand for foreign currency. Key words: Trade Openness, Volatility, Exchange Rate, ARDL, GARCH 1.0 Introduction One of the challenges facing most developing economies and particularly Nigeria is the maintenance of exchange rate stability, price stability and sustainable economic growth and development. In Nigeria, the Central Bank is the apex bank saddled with the responsibility of maintaining price and exchange stability in the economy and this is done by ensuring low inflationary pressure. However, for the past few decades, Nigeria has persistently witnessed volatility of her exchange rate. Yakub, Sani, Obiezue, and Aliyu (2019) posited that exchange rates is highly volatile and have fluctuated widely in Nigeria virtually in all the segments of the foreign exchange markets; official, bureau de change and parallel markets. During the Structural Adjustment Programme (SAP) in 1986, exchange rate stood at N2.02 per US dollar but in 1987,1990, 1991 and 1994 it depreciated to an average of N4.01, N8.04 N9.09 and N22.00 respectively. Again, the value of naira depreciated to N97.95 per US dollar in 1999, N125 between 2000 and 2006 and appreciated slightly to N117.97 per US dollar in 2007. Meanwhile, in 2009 the naira depreciated to N149.58 per US dollar as a result of the global financial crisis coupled with the decline in the international oil price. In 2012, it depreciated further to N158.55 in 2014 and then N189.49 in 2015 , N253.19 in 2016, N305.30 in 2017