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TRADE POLICY

TRADE POLICY

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    Article on nigeria trade policy Article on nigeria trade policy Document Transcript

    • NIGERIA TRADE POLICY AND DEVELOPMENT AT CROSS-ROADS: AN EMPIRICAL ASSESSMENT OF NIGERIA TRADE POLICY (1984-2011). Ogbaji, Udochukwu A.O Department Of Public Administration, Federal Polytechnic, Oko. Anambra State. Nigeria. Email: Udojoel77@yahoo.ca Phone: 08033486531 And Ebebe, Gertrude Chiebonam Department Of Business Administration And Mgt, Federal Polytechnic, Oko. Anambra State. Nigeria. Phone: 08068888717AbstractThis research thesis presents an empirical assessment of Nigeria trade policy between1984-2011. The research design used for this research is survey design. This designwas used so as to capture the entire domain of the study. We adopted both primaryand secondary sources of data collection while the main research instrument used forthe study is research questionnaire. The research analysis relied on systems theory toadvance its argument. From the findings of this work, it is evident that the TradePolicies in Nigeria (1984-2011) have not contributed immensely to the developmentalgrowth of the country. Although, the economic profile over the past few years showsrelatively stable exchange rates and fairly stable inflation trends (down from 18.6 percent to 11.6 per cent in the last quarter of 2005). Fiscal deficits declined from 8.4 percent of GDP in 1999 to 2.8 percent in 2003, reflecting a measure of public-sectorbelt-tightening. We finally recommended, amongst others that there is need for aneffective harnessing of available resources under well articulated and stable policyenvironment. There is also the need to employ civil servants that are well grounded inpolicy making. Most of the people in the field are not experts therefore cannot makepolicies that will engender a great change. 1
    • IntroductionBackground of the Study The Nigerian government like many other developing countries considers tradeas the main engine of its development strategies, because of the implicit belief thattrade can create jobs, expand markets, raise incomes, facilitate competition anddisseminate knowledge. (WTO 2005: 15). The main thrust of trade policy is thereforethe enhancement of competitiveness of domestic industries, with a view to stimulatinglocal value-added and promoting a diversified export base. Trade policy also seeks(through gradual liberalization of the trade regime) to create an environment that isconducive to increased capital inflows, and to transfers and adoption of appropriatetechnologies. The government pursues the liberalization of its trade regime in a verymeasured manner, which would ensure that the resultant domestic costs of adjustmentdo not outweigh the benefits. The reforms which accompany this policy direction arealso aimed at re-orientating attitudes and practices towards modern ways of doingbusiness. However, the instrument of trade policy such as the tariff regime is designedin a manner which allows a certain level of protection of domestic industry andenterprise. An assessment of Nigerias trade policy since the 1960s reflects a trend whichhas been known to characterize uncertain and unpredictable trade regimes the worldover. Trade policy since the 1960s has witnessed extreme policy swings from highprotectionism in the first few decades after independence to its current more liberalstance (Adenikinju 2005:113). Tariffs have at various times been used to raise fiscalrevenue, limit imports to safeguard foreign exchange or even protect the domesticindustries from competition. In addition, various forms of non-tariff barriers such asquotas, prohibitions and licensing schemes have on various occasions beenextensively used to limit imports of particular items. The overall pattern portrays thelong-held belief that trade policy can be used to influence the trade regime in 2
    • directions that can promote economic growth. Attempts were made to use trade policyto promote manufactured exports and enhance the linkages in the domestic economy,to increase and stabilize export revenue, and scale down the countrys reliance on theoil sector (Olaniyi 2005: 7). Trade policies were accordingly directed at discouragingdumping; supporting import substitution; stemming adverse movements in thebalance of payments; conserving foreign exchange; and generating governmentrevenue (Bankole and Bankole: 2004). However, during the first decade of independence, Nigeria pursued an importsubstitution industrialization strategy. This involved the use of trade policy to provideeffective protection to local manufacturing industries, through such measures asquantitative restrictions and high import duties. Many items were accordingly placedon import prohibition. During this period, all imports from Japan were placed underimport license. Machinery and spare parts imports were restricted and exchangecontrols on the repatriation of dividends and profits were enforced. Restrictions werealso applied on capital goods, spare parts and non-essential imports. More so, from 1981, there was a policy shift towards exports promotion and amove to intensify the use of local raw materials in industrial production. However, theincrease in the value of imports led to a worsening of the balance of payments (with,in addition, the backdrop of the collapse in world oil prices), which forced thegovernment to promulgate the Economic Stabilization (Temporary Provisions) Act inApril 1982. Under this Act, tariffs on 49 items were raised, while a prohibition wasimposed on gaming machines and frozen poultry. Further, 29 commodities wereremoved from the general import license regime and placed under specific license,while the use of pre-shipment inspection became widespread. During 1983 - 1985,152 items were brought under specific import license, and foreign exchangeregulations became more stringent (Briggs, 2007). The central objective of tradepolicy was to provide protection for domestic industries and reduce the perceiveddependence on imports; a corollary to that objective was a desire to reduce the levelof unemployment and generate more revenues from the non-oil sector. Accordingly,tariffs on raw materials and intermediate capital goods were scaled down. From 1986, there was a significant shift in trade policy direction towardsgreater liberalization. This shift in policy is directly attributable to the adoption of thestructural adjustment programmes. The Customs, Excise, Tariff etc (Consolidation) 3
    • Decree, enacted in 1988, was based on a new Customs goods classification, theHarmonized System of Customs Goods Classification Code (HS). It provided for aseven-year (1988 -1994) tariff regime, with the objective of achieving transparencyand predictability of tariff rates. Imports under the regime thus attracted ad valoremrates applied on the Most Favoured Nation (MFN) basis. A new seven-year (1995 -2001) tariff regime, established by Decree No. 4 of 1995 succeeded the previous(1988 – 1994) regime. The tariff structure over the period 1988 - 2001 increasedimport duties on raw materials, and on intermediate and capital goods, while tariffs onconsumer goods were slightly reduced. This was aimed at reducing distortions inresource allocation and combating smuggling. Both the 1988 and 1995 tariffschedules had provisions for reviews and amendments. However, they maintained thefamiliar mixed trends in tariff regimes. Three types of changes were subsequentlycommon, namely: reduction in rates; increase in rates and/or removal from or additionto the import prohibition list. Presently, Nigeria’s trade policy regime as currently contained in the NEEDSand trade policy documents, has been geared to enhancing competitiveness ofdomestic industries, with a view to, encouraging local value-added and promoting aswell as diversifying exports. The mechanism adopted to this end is gradualliberalization of the trade regime. Thus, the government intends to liberalize the traderegime in a manner, which will ensure that the resultant domestic costs of adjustmentdo not outweigh the benefits. This is the fundamental basis on which to gauge thedirection and implementation of policy. NEEDS is a medium-term economic strategy covering the period 2003 – 2007.It has been described as Nigeria’s plan for prosperity, the vision for a greatertomorrow. Within that perspective, NEEDS focuses on four key strategies: reorientingvalues, reducing poverty, creating wealth and generating employment. These keyvisionary goals are, in turn, built into three major macroeconomic frameworks,namely, empowering people, promoting private enterprise and appropriatelyreordering approaches to governance. The overall long-term vision of NEEDSincludes social and economic transformation of Nigeria on a sustainable andcompetitive basis.Statement of the Problem 4
    • As part of the effort by many African countries to regain economic andfinancial balance, government officials have increasingly turned their attention toimproving trade policies. Various trade policies in Nigeria made far reaching attemptsat revolutionizing the Nigeria’s economy in all facets. All the trade policies from 1960to present, by different regimes were equally aimed at properly structuring the countryto be more people centered. The magnitude of the distortions in the economy usheredin by the culture of controls made it imperative for government to take urgent anddrastic actions to ameliorate the situation. Thus, in July, 1986, the StructuralAdjustment Programme (SAP) was introduced to tackle the problem of imbalances inthe economy and thereby pave the way for stable growth and development. The adoption of the Structural Adjustment Programme (SAP) was aimed atcorrecting the observed distortions in the economy during the latter years of theFourth National Development Plan. The impact of these policy initiatives was positiveon the overall performance of the economy, especially during the early years of theadoption of the SAP. Except the decline experienced in 1987, the GDP growth rate (at1984 factor cost) was 9.9 percent in 1988, and averaged 5.8 percent between 1989 and1992. In spite of the favourable overall performance of the economy, the pattern ofdomestic output did not change from what it was before the introduction of SAP. Upto 1988, the share of agriculture in total output continued to surpass that of the othersectors of the economy. Apart from 1986, when manufacturing activities declined, the rate of productionincreased continuously up to 1992, later declined between 1993 - 1996. The share ofmanufacturing output to GDP averaged 6.3 percent in 1986 - 1992, as against 9.0percent between 1980 - 1985. The reduced contribution to GDP was as a result of therelatively slow rate of adjustment by the manufacturing sub-sector to the new strategyof backward integration designed to make the economy self-sufficient and to relievethe balance of payments of demand pressures. Industries that were able to findalternative sources for their raw materials locally had a boost in their capacityutilisation standing between 56 - 60 percent for most part of the post-SAP period. The problem now is that despite all the changes in policy thrust and variousamendments, Nigeria is yet to have a stable economy. In the agricultural sector, thereis the problem of poor funding, high cost of production input in agriculture due to thedepreciation of the naira, the predominance of small holder agricultural activities etc. 5
    • The manufacturing sector remained hampered by high external dependence of themanufacturing sector, low technological capability, low internal linkages amongindustries, decay of infrastructural facilities, etc. The prospect of expansion ofNigeria’s domestic production is still very high going by the abundant supply ofuntapped natural resources, large domestic market, and growing number of trainedmanpower. It is therefore the aim of this study to look into the above problems of trade policiesin Nigeria especially between 1984-2011. From the foregoing, the following pertinent research question becomesimperative: To what extent has the trade policies in Nigeria between 1984-2011 engender socio-economic and political development/growth?Objective of Study Our main objective is to assess the Nigeria’s trade policy between 1984-2011and find if these policies has engendered socio-economic and politicaldevelopment/growth.Significance of Study The study is an empirical finding/assessment with a focus to the Nigeria tradepolicies (1984-2011). We gave the background of Nigeria’s trade policy from 1960 topresent just to capture a clear picture of the real situation in Nigeria. This studycompliments other existing studies and also helps in advancing our knowledge on therudiments of Nigeria’s trade policies in general. The study aims at making somegeneralizations and assumptions that can provoke interest for further studies.Scope and Limitations of Study The study is on Nigeria trade policies (1984-2011). It will assess the Nigeria’strade policy between 1984-2011 and find if these policies has engendered socio-economic and political development/growth. The study is limited to trade policies inNigeria. It suffices to note that the study suffers some limitations. First, the studysuffered slow rate of response from the respondents. Yet at the end of the exercise, wewere not able to retrieve all the questionnaires given to the respondents. Out of 1,200questionnaires distributed, only 984 were returned. Second the study also sufferedfrom shortage of finance. A study of this nature requires enough funding if possible 6
    • from donor agency to ensure a comprehensive study. Third the unwillingness of theministry of economic planning, Abuja to release some basic information needed forthe study is another serious problem. However, it must be pointed that spirited efforts were made to address some ofthese limitations. For example, we had to rely on academic journals, newspapers,magazines and the internet to get some of the needed data.Conceptualizing Trade Policy Trade policy is a collection of rules and regulations which pertain to trade.Every nation has some form of trade policy in place, with public officials formulatingthe policy which they think would be most appropriate for their country. The purposeof trade policy is to help a nations international trade run more smoothly, by settingclear standards and goals which can be understood by potential trading partners. Inmany regions, groups of nations work together to create mutually beneficial tradepolicies. (http://www.wisegeek.com/what-is-trade-policy.htm) Things like import and export taxes, tariffs, inspection regulations, and quotascan all be part of a nations trade policy. Some nations attempt to protect their localindustries with trade policies which place a heavy burden on importers, allowingdomestic producers of goods and services to get ahead in the market with lower pricesor more availability. Others eschew trade barriers, promoting free trade, in whichdomestic producers are given no special treatment, and international producers arefree to bring in their products (http://www.wisegeek.com/what-is-trade-policy.htm) Various literatures on international trade recognize trade as a vital catalyst foreconomic development. For developing countries, the contribution of trade to overalleconomic development is immense, owing largely to the obvious fact that most of theessential elements for development such as, capital goods, raw materials and technicalknow-how, are almost entirely imported because of inadequate domestic supply.Since the currencies of this group of countries are not convertible, foreign exchangehas to be earned through exports to be able to pay for imports. Increased domesticdemand invariably solicits corresponding expansion in exports. To enhance exportcapacity therefore, improved technology must be required, and this in turn furtherpushes up demand for imports. This circle of activities has the tendency of pushingimports far ahead of exports and in consequence exerts undue pressures on thebalance of payments. Prolonged pressures on the balance of payments constitute 7
    • constraints to economic development and thus, appropriate economic policy measureshave to be put in place to streamline external trade transactions to conform to desiredgoal of economic development.Trade Policy Trends Between 1980 - 1990s From 1981, there was a policy shift towards exports promotion and a move tointensify the use of local raw materials in industrial production. However, the increasein the value of imports led to a worsening of the balance of payments (with, inaddition, the backdrop of the collapse in world oil prices), which forced thegovernment to promulgate the Economic Stabilization (Temporary Provisions) Act inApril 1982. Under this Act, tariffs on 49 items were raised, while a prohibition wasimposed on gaming machines and frozen poultry. Further, 29 commodities wereremoved from the general import license regime and placed under specific license,while the use of pre-shipment inspection became widespread. However, during 1983 - 1985, 152 items were brought under specific importlicense, and foreign exchange regulations became more stringent. The centralobjective of trade policy was to provide protection for domestic industries and reducethe perceived dependence on imports; a corollary to that objective was a desire toreduce the level of unemployment and generate more revenues from the non-oilsector. Accordingly, tariffs on raw materials and intermediate capital goods werescaled down.The Structural Adjustment Era From 1986, there was a significant shift in trade policy direction towardsgreater liberalization. This shift in policy is directly attributable to the adoption of thestructural adjustment programmes. The Customs, Excise, Tariff etc (Consolidation)Decree, enacted in 1988, was based on a new Customs goods classification, theHarmonized System of Customs Goods Classification Code (HS). It provided for aseven-year (1988 -1994) tariff regime, with the objective of achieving transparencyand predictability of tariff rates. Imports under the regime thus attracted ad valoremrates applied on the Most Favoured Nation (MFN) basis. A new seven-year (1995 -2001) tariff regime, established by Decree No. 4 of 1995 succeeded the previous(1988 – 1994) regime. The tariff structure over the period 1988 - 2001 increased import duties on rawmaterials, and on intermediate and capital goods, while tariffs on consumer goods 8
    • were slightly reduced. This was aimed at reducing distortions in resource allocationand combating smuggling. Both the 1988 and 1995 tariff schedules had provisions forreviews and amendments. However, they maintained the familiar mixed trends intariff regimes. Three types of changes were subsequently common, namely, reductionin rates; increase in rates and/or removal from or addition to the import prohibitionlist.Trade Policy under the NEEDS Era (1999 - 2006) As pointed out above, Nigerias trade policy regime as currently contained inthe NEEDS and trade policy documents, has been geared to enhancingcompetitiveness of domestic industries, with a view to, inter alia, encouraging localvalue-added and promoting as well as diversifying exports. The mechanism adoptedto this end is gradual liberalization of the trade regime. Thus, the government intendsto liberalize the trade regime in a manner, which will ensure that the resultantdomestic costs of adjustment do not outweigh the benefits. This is the fundamentalbasis on which to gauge the direction and implementation of policy. The clarion callis "gradual liberalization". This addresses the question as to what is the kind of tradestrategy the government has adopted in furtherance of its development agenda.Current reform packages are therefore designed to allow a certain level of protectionof domestic industries and enterprise. Concretely, this has translated into tariffescalation, with high effective rates in several sectors and lower import duties on rawmaterials and intermediate goods unavailable locally. This policy perspective has alsoled to the application of relatively high import duties on finished goods whichcompete with local production.Nigerias Current Trade Policy Thus, as observed above, the Nigerian government like many other developingcountries, considers trade as the main engine of its development strategies, because ofthe implicit belief that trade can create jobs, expand markets, raise incomes, facilitatecompetition and disseminate knowledge. (WTO 2005: 15). The main thrust of tradepolicy is therefore the enhancement of competitiveness of domestic industries, with aview to, inter alia, stimulating local value-added and promoting a diversified exportbase. Trade policy also seeks (through gradual liberalization of the trade regime) tocreate an environment that is conducive to increased capital inflows, and to transfers 9
    • and adoption of appropriate technologies. The government pursues the liberalizationof its trade regime in a very measured manner, which would ensure that the resultantdomestic costs of adjustment do not outweigh the benefits. The reforms whichaccompany this policy direction are also aimed at re-orientating attitudes andpractices towards modern ways of doing business. However, the instruments of tradepolicy such as the tariff regime are designed in a manner which allows a certain levelof protection of domestic industry and enterprise. While this is the main trade policyframework to guide economic growth, the trade expansion, employment generationand poverty alleviation dimensions are now subsumed in a new overarching economicdevelopment policy blueprint adopted in 2003, the National Economic Empowermentand Development Strategy (NEEDS). In the trade policy area, NEEDS seeks to deepen Nigeria’s integration with therest of the world and to maximize the benefits of strategic integration. Accordingly,regional integration and trade are the two instruments identified by NEEDS formaximizing the benefits of globalization. The trade policy objective under NEEDS isto lay a solid foundation for fully exploiting Nigeria’s potentialities in internationaltrade. While aspiring to the above, NEEDS has by no means overlooked thechallenges which have so far hampered the realization of these potentialities. However, a number of constraints are identified, namely: the high cost of doingbusiness; inadequate infrastructure; poorly implemented incentives, especially inregard to fiscal and tariff regimes; widespread smuggling, counterfeiting anddumping; lack of standardization, required for products to compete internationally;and unfavourable international trade rules Under NEEDS, the trade policy thrust is todrastically reduce the uncertainty and unpredictability of the trade policy regime;harmonize trade practices with those of other Economic Community of West AfricanStates (ECOWAS) countries and hence facilitate full integration; respect obligationsunder multilateral and regional trading systems; and create a conducive andcompetitive environment in which Nigerian enterprises can thrive and effectivelycompete in the global and regional economy.Hypothesis The Nigeria’s trade policy (1984-2011) has not contributed significantly to thesocio-economic and political development/growth of the country.Theoretical Framework. 10
    • This study adopts the system theory to justify or advance its arguments. Thesystem theory was propounded by David Easton and it describes public policy as anoutput of the political system. Trade policy is a part of public policy. The theoryconceives of political activity as essentially involving the environment, the politicalsystem and output (Ikelegbe, 2006:36). The environment is where demands arisesand are placed on the political system. Demand of different kinds emanate in asociety and are expressed through various methods upon the political system. The political system is made up of institutions, processes and governmentpersonnel (Ikelegbe, 2006:36) and the political system is the processor of the demands(inputs) from different societal groups into outputs which are the public policy. Theauthoritative allocations or outputs are the public policies. Public policies are thereaction of the political system to environmental demands and pressure (Ikelegbe,2006: 36). The kind of society determines the kind of policy demands. In an autocraticsociety, the policy demand will essentially be that of political reforms or demand fordemocratization. The nature of the political system whether developed or developingdetermines its ability to process accurately the demands from the environment. Theoutputs which are public policies are continually responded to by the citizenry andthis is feedback to the system that brings about new policies or the modification ofexisting policies (Ikelegbe, 2006 : 37). All theoretical frameworks have its limitations and the system theory is not anexception. Ikelegbe (2006: 37) observes that the theory assumes that policies areenvironmental input converted by the political systems. It fails to recognize that thecharacteristics of the political system itself may have considerable independent effecton the content of policies. Despite this, the system theory has the advantage of insights into the totality ofthe policy process and the interactions between the component parts.Methodology Data for this study was collected mainly through descriptive survey design.This was necessary so as to be able to capture the entire domain of the study. 11
    • Consequently, both the primary and secondary sources of data collection wereexplored. Primary sources of data were questionnaire instrument and in-depthinterview. The questionnaire instrument enabled us to elicit information on theproblematic which the study seeks to unravel. The questionnaire instrument wasstructured along the close ended format and administered in such a way that made itfairly representative of all shades of opinion and interests. This was complimentedwith in-depth interview with some of the senior Civil servants in the federalsecretariat, Abuja and some key officers in the Ministry of Economic Planning. Secondary sources of data include information retrieved from journals,newspapers and magazines. The study covered the entire 36 states of the federation made up of 6 geo-political zones – namely: South-South, South East, South-West, North-West, NorthCentral and North-East. A sample size of one thousand two hundred was originallyselected. The choice of one thousand two hundred (1,200) is informed by theconsideration of some human and financial face (Obasi, 1999). Also considering thehomogenous composition of the nation, our belief is that a sample of 1,200 is large,representative and reliable enough to allow us make generalizations. The study adopted the multi-stage sampling method which involves samplingin successive stages such that at each stage selection is made using any of the knownprobability sampling methods (Biereenu-Nnabugwu, 2006). This was done to help ussave time and cost. In the first stage, the study adopted the stratified samplingtechnique to get respondents from the six geo-political zones in the country. This wasto ensure a fair representation of all shades of opinion, interest and groups in the statewhich could have been lost to the chance factor (Obasi, 1999). In using the stratifiedsampling technique, the study further adopted the disproportional stratified samplingtechnique in the sense that the numerical strength of the geo-political zones were notconsidered in the representation into the sample (Biereenu-Nnabugwu, 2006). Thus,in the distribution, the six geo-political zones got 200 respectively. However, in the South-South, we picked Rivers State, in the South-East, wepicked Anambra State, in the South-West-Lagos, in the North-West – Sokoto, in theNorth-Central – Kaduna and in the North-East we picked Plateau State. The choice ofthese major States is also based on two major reasons. First, there seems to be a very 12
    • high concentration of people in these States as a result of urbanization. Secondly, theyoccupy important positions in the socio-economic and political setting of the country. The presentation and analysis of data were carried out using both descriptivequalitative and quantitative methods. While qualitative analysis was merelydescriptive and theoretical, the quantitative method employed appropriate statisticaltools particularly the frequency distribution and simple percentages.Findings and Conclusions From the findings of this work, it is evident that the Trade Policies in Nigeria(1984-2011) has not contributed immensely to the developmental growth of thecountry. Although, the economic profile over the past few years shows relativelystable exchange rates and fairly stable inflation trends (down from 18.6 per cent to11.6 per cent in the last quarter of 2005). Fiscal deficits declined from 8.4 per cent ofGDP in 1999 to 2.8 percent in 2003, reflecting a measure of public-sector belt-tightening. In spite of huge receipts from crude oil exports, an element of instability hasmore recently been observed in the exchange rate, which in itself is a disincentive toinvestments in export oriented sectors. The uncertainty that has appeared tocharacterize macroeconomic policy has led to the erosion of confidence within theranks of the international investor community. Frequent policy changes and weakregulatory and institutional frameworks have not helped matters. The steady rise in the price of crude oil has had its positive side, which is tohelp build a sizeable foreign exchange revenue base; it has also proved to be a criticalfactor in the successful negotiation of the repudiation of Nigeria’s huge external debt.The flipside to this conjuncture is that Nigeria being a net importer of a raft ofcommodities, and also unable to meet the demands of domestic consumption ofpetroleum products, has had to contend with increasing import prices, translating intonegative impacts on the poor. In the face of rising crude oil prices, the governmenthas consistently pursued a policy of deregulation of the oil sector, leading to periodichikes in the price of refined petroleum products. This has typically generated adomino effect on commodity prices generally, i.e. foodstuffs, transport, housing, andother basic necessities. The Nigerian government is yet to evolve a mechanism of adequate social-sector safety nets, to mitigate the adverse circumstances generated by price increases; 13
    • which when they target the poor, increase rather than reduce poverty levels in thecountry. Given the dominance of crude oil in Nigerias exports, oil price fluctuationpresents challenges to macroeconomic policies, with consequences on thecompetitiveness of non-petroleum exports. Inadequacies in infrastructure (notablyroads, transport raised the cost of doing business. Critical among them is the seriousdeficiency in the supply of electricity, which persistently defies solutions. A study onthe cost of infrastructure failure in Nigeria has indicated that respondents had rankedpower outages and voltage fluctuations as among the major obstacles to theiroperations. The huge cost of production means that Nigeria’s manufactured goods donot have the desired competitive edge in the international markets. As part of thebroad policy reforms especially in the area of privatization, port reforms are alreadyunder way with the "Port Concessioning" exercise. The bottlenecks bedevilingNigeria’s port system are persistent, and the governments directive for goods to becleared within forty-eight hours after landing at port, is infrequently realized. In recenttimes, government has been constrained to set up a task force to decongest the ports.Access to finance is known to be hindered by high interest rates and collateralrequirements. Long-term access to finance is scant, and so it is only the largemultinational firms that are likely to receive loans, while the small-scale entrepreneursare marginalized. Nonetheless, one of the NEEDS objectives is the enhancement ofthe capacities of the SMEs.RecommendationsFrom the foregoing, we recommend as follows: 1. There is need to employ civil servants that are well grounded in policy making. Most of the people in the field are not experts therefore cannot make policies that will engender a great change. 2. The problem of policy implementation and assessment is still a great problem. There is need to have a separate cadre of the civil servants that will always be on the implementation and assessment area of the trade policies to make sure they are well implemented. 3. There is need for an effective harnessing of available resources under well articulated and stable policy environment. 4. Government should increase its funding to the agricultural sector as well as encourage the private sector to do the same. More importantly, there is need for intensified monitoring of agricultural policy implementation; external 14
    • market for agricultural commodities should be expanded through bilateral negotiations with other countries whereby a given quantity of Nigeria’s commodities is exchanged for imports from the negotiating country, and the difference is settled in foreign exchange. 5. Large scale farming should be encouraged with substantial government support; 6. Technological transfer that will be necessary for the expansion of Nigeria’s industrial base lies in attraction of foreign investors into Nigeria. Adequate incentives should be extended to such willing investors; 7. Privatization of Nigeria’s industrial concerns should be given adequate attention and speedily implemented; 8. Manufacturing should now shift attention to the manufacture of intermediate products, chemicals, machine tools and equipment, in order to provide domestic linkages among industries. 9. (vii) there is urgent need to improve infrastructural facilities in order to provide 10. adequate support to production; 11. There is need to have in place, strategic plans that will span about five years toward reducing the importation of raw materials for which Nigeria has abundance of local alternatives. Reliance on domestic input supply will substantially reduce the rate of growth and cost of foreign input in the production process and hence lead to improvement in productivity.REFERENCESAdenikinju, Adeola F., (2005). African Imperatives in the New World Trade Order: country Case Study of the Manufacturing Sector in Nigeria, in Ogunkola O, E. and Bankole A. (eds) Nigerias Imperatives in the New World Trade Order, Africa Economic Research Consortium (Nairobi, Kenya) and the Trade Policy Research and Training Programme (Ibadan, Nigeria).Agbaje, Adigun and Afeikena Jerome, (2005). Institutional Framework and Process for Policy Making in Africa: The Case of Nigeria, in Ogunkola, O E. and Bankole, A. (eds) Nigerias Imperatives in the New World Trade Order, Africa Economic Research Consortium (Nairobi, Kenya) and the Trade Policy Research and Training Programme (Ibadan, Nigeria).Afeikhena Jerome, (2005). Strengthening Research and Analytical Support for Trade Policy-Making in African Countries: The case for Nigeria. Paper presented at SISERA Conference Dakar Senegal, January 2005.Aremu J. A., (2004). "Trade Policy as Instrument for Poverty Reduction in Nigeria", Paper Presented at the workshop on Nigerias Trade Policy Process, Organized 15
    • by the National Association of Nigerian Traders and Heinrich Boll Foundation (Nigeria), 30 November – 2nd December 2004, Abuja.Bankole, A. S. and Bankole, M. A., (2004). Industrial Trade and Export Promotion Policies and Revealed Comparative Advantage in Nigerias Manufactured Exports, In Garba, Abdul-Ganiyu et al (eds), Leading Issues in Macroeconomic Management and Development, NES, Ibadan.Bankole, A. S., (2005). Improving Africas Participation in the WTO, Paper Presented at the Capacity Building Workshop on International Trade. National Assembly in Collaboration with Friedrich Ebert Stiftung (Nigeria), Jos, 25 - 27 July 2005.Briggs, Inye N., (2005). Nigeria: Protecting Domestic Productions in times of Liberalisation and the Short, Medium and Long Term Implications for Regional Integration. Paper presented at the ECOWAS Regional Workshop on Multilateral Trade Agreements, Parliament of Ghana and the Friedrich EbertStiftung (Ghana), Accra, 27 November 2005.Butegwa, Florence, (2004). The Place of Gender in Nigerias Trade Policy. Paper Presented at the Workshop on Nigerias Trade Policy Process, Organised by the National Association of Nigerian Traders and Heinrich Boll Foundation (Nigeria), 30 November - 2nd December 2004, Abuja.Commonwealth Secretariat, (2006). Nigeria Food Safety and Quality Control Review. Final Report of a Commonwealth Funded Study, London.Biereenu-Nnabugwu, M.. (2006). Fundamental of Political Inquiry. Enugu: Quintagon.Federal Ministry of Commerce, (2002). Trade Policy of Nigeria, Abuja, NigeriaFederal Ministry of Commerce, (2005). 2005 Ministerial Press Briefing, Abuja.Finger, Michael, J. and Schuler, Philip (2002). Implementing WTO Commitments: The Development Challenge, in Hoekman, Bernard, Mattoo, Aaditya and English, Philip (eds). Development, Trade and the WTO, A Handbook. World Bank, Washington D.C.National Planning Commission, (2004). National Economic Empowerment and Development Strategy (NEEDS), Abuja, NigeriaObasi, I.N. (1999). Research Methodology in Political Science. Enugu: Academic Publishers. 16
    • Ogunkola, Olawale E., (2005). Advancing Nigerias Agricultural Development through Doha Development Round (DDR). In Ogunkola O. E. and Bankole A (eds). Nigerias Imperatives in the New World Trade Order, Africa Economic Research Consortium (Nairobi, Kenya) and the Trade Policy Research and Training Programme (Ibadan, Nigeria).Olaniyi, Oyinlola (2005). Nigerias Trade Policy from 1960 - 2004: A critical Review. Paper presented at the Workshop on Capacity Building on International Trade. National Assembly in Collaboration with Friedrich Ebert Stiftung (Nigeria), Jos, 25 - 27 July 2005.Osakwe, Chiedu and Sarath, Rajapatirana (2001). "Mainstreaming Trade in Development Strategy". Available online at www.southcentre.org/info/south bulletin07/bulletin07-03.htmOyejide, Ademola T., (2002). External Sector Policies in the 2002 Federal Budget: An Assessment.NCEMA Policy Analysis Series, Vol. 8, No. 1, 63 -78. 17