1. 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: 08068888717
Abstract
This research thesis presents an empirical assessment of Nigeria trade policy between
1984-2011. The research design used for this research is survey design. This design
was used so as to capture the entire domain of the study. We adopted both primary
and secondary sources of data collection while the main research instrument used for
the study is research questionnaire. The research analysis relied on systems theory to
advance its argument. From the findings of this work, it is evident that the Trade
Policies in Nigeria (1984-2011) have not contributed immensely to the developmental
growth of the country. Although, the economic profile over the past few years shows
relatively stable exchange rates and fairly stable inflation trends (down from 18.6 per
cent to 11.6 per cent in the last quarter of 2005). Fiscal deficits declined from 8.4 per
cent of GDP in 1999 to 2.8 percent in 2003, reflecting a measure of public-sector
belt-tightening. We finally recommended, amongst others that there is need for an
effective harnessing of available resources under well articulated and stable policy
environment. There is also the 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.
1
2. Introduction
Background of the Study
The Nigerian government like many other developing countries considers trade
as the main engine of its development strategies, because of the implicit belief that
trade can create jobs, expand markets, raise incomes, facilitate competition and
disseminate knowledge. (WTO 2005: 15). The main thrust of trade policy is therefore
the enhancement of competitiveness of domestic industries, with a view to stimulating
local value-added and promoting a diversified export base. Trade policy also seeks
(through gradual liberalization of the trade regime) to create an environment that is
conducive to increased capital inflows, and to transfers and adoption of appropriate
technologies. The government pursues the liberalization of its trade regime in a very
measured manner, which would ensure that the resultant domestic costs of adjustment
do not outweigh the benefits. The reforms which accompany this policy direction are
also aimed at re-orientating attitudes and practices towards modern ways of doing
business. However, the instrument of trade policy such as the tariff regime is designed
in a manner which allows a certain level of protection of domestic industry and
enterprise.
An assessment of Nigeria's trade policy since the 1960s reflects a trend which
has been known to characterize uncertain and unpredictable trade regimes the world
over. Trade policy since the 1960s has witnessed extreme policy swings from high
protectionism in the first few decades after independence to its current more liberal
stance (Adenikinju 2005:113). Tariffs have at various times been used to raise fiscal
revenue, limit imports to safeguard foreign exchange or even protect the domestic
industries from competition. In addition, various forms of non-tariff barriers such as
quotas, prohibitions and licensing schemes have on various occasions been
extensively used to limit imports of particular items. The overall pattern portrays the
long-held belief that trade policy can be used to influence the trade regime in
2
3. directions that can promote economic growth. Attempts were made to use trade policy
to promote manufactured exports and enhance the linkages in the domestic economy,
to increase and stabilize export revenue, and scale down the country's reliance on the
oil sector (Olaniyi 2005: 7). Trade policies were accordingly directed at discouraging
dumping; supporting import substitution; stemming adverse movements in the
balance of payments; conserving foreign exchange; and generating government
revenue (Bankole and Bankole: 2004).
However, during the first decade of independence, Nigeria pursued an import
substitution industrialization strategy. This involved the use of trade policy to provide
effective protection to local manufacturing industries, through such measures as
quantitative restrictions and high import duties. Many items were accordingly placed
on import prohibition. During this period, all imports from Japan were placed under
import license. Machinery and spare parts imports were restricted and exchange
controls on the repatriation of dividends and profits were enforced. Restrictions were
also applied on capital goods, spare parts and non-essential imports.
More so, from 1981, there was a policy shift towards exports promotion and a
move to intensify the use of local raw materials in industrial production. However, the
increase 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 the
government to promulgate the Economic Stabilization (Temporary Provisions) Act in
April 1982. Under this Act, tariffs on 49 items were raised, while a prohibition was
imposed on gaming machines and frozen poultry. Further, 29 commodities were
removed 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 exchange
regulations became more stringent (Briggs, 2007). The central objective of trade
policy was to provide protection for domestic industries and reduce the perceived
dependence on imports; a corollary to that objective was a desire to reduce the level
of 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 towards
greater liberalization. This shift in policy is directly attributable to the adoption of the
structural adjustment programmes. The Customs, Excise, Tariff etc (Consolidation)
3
4. Decree, enacted in 1988, was based on a new Customs goods classification, the
Harmonized System of Customs Goods Classification Code (HS). It provided for a
seven-year (1988 -1994) tariff regime, with the objective of achieving transparency
and predictability of tariff rates. Imports under the regime thus attracted ad valorem
rates 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 raw materials, and on intermediate and capital goods, while tariffs on
consumer goods were slightly reduced. This was aimed at reducing distortions in
resource allocation and combating smuggling. Both the 1988 and 1995 tariff
schedules had provisions for reviews and amendments. However, they maintained the
familiar mixed trends in tariff regimes. Three types of changes were subsequently
common, namely: reduction in rates; increase in rates and/or removal from or addition
to the import prohibition list.
Presently, Nigeria’s trade policy regime as currently contained in the NEEDS
and trade policy documents, has been geared to enhancing competitiveness of
domestic industries, with a view to, encouraging local value-added and promoting as
well as diversifying exports. The mechanism adopted to this end is gradual
liberalization of the trade regime. Thus, the government intends to liberalize the trade
regime in a manner, which will ensure that the resultant domestic costs of adjustment
do not outweigh the benefits. This is the fundamental basis on which to gauge the
direction 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 greater
tomorrow. Within that perspective, NEEDS focuses on four key strategies: reorienting
values, reducing poverty, creating wealth and generating employment. These key
visionary goals are, in turn, built into three major macroeconomic frameworks,
namely, empowering people, promoting private enterprise and appropriately
reordering approaches to governance. The overall long-term vision of NEEDS
includes social and economic transformation of Nigeria on a sustainable and
competitive basis.
Statement of the Problem
4
5. As part of the effort by many African countries to regain economic and
financial balance, government officials have increasingly turned their attention to
improving trade policies. Various trade policies in Nigeria made far reaching attempts
at revolutionizing the Nigeria’s economy in all facets. All the trade policies from 1960
to present, by different regimes were equally aimed at properly structuring the country
to be more people centered. The magnitude of the distortions in the economy ushered
in by the culture of controls made it imperative for government to take urgent and
drastic actions to ameliorate the situation. Thus, in July, 1986, the Structural
Adjustment Programme (SAP) was introduced to tackle the problem of imbalances in
the economy and thereby pave the way for stable growth and development.
The adoption of the Structural Adjustment Programme (SAP) was aimed at
correcting the observed distortions in the economy during the latter years of the
Fourth National Development Plan. The impact of these policy initiatives was positive
on the overall performance of the economy, especially during the early years of the
adoption of the SAP. Except the decline experienced in 1987, the GDP growth rate (at
1984 factor cost) was 9.9 percent in 1988, and averaged 5.8 percent between 1989 and
1992. In spite of the favourable overall performance of the economy, the pattern of
domestic output did not change from what it was before the introduction of SAP. Up
to 1988, the share of agriculture in total output continued to surpass that of the other
sectors of the economy.
Apart from 1986, when manufacturing activities declined, the rate of production
increased continuously up to 1992, later declined between 1993 - 1996. The share of
manufacturing output to GDP averaged 6.3 percent in 1986 - 1992, as against 9.0
percent between 1980 - 1985. The reduced contribution to GDP was as a result of the
relatively slow rate of adjustment by the manufacturing sub-sector to the new strategy
of backward integration designed to make the economy self-sufficient and to relieve
the balance of payments of demand pressures. Industries that were able to find
alternative sources for their raw materials locally had a boost in their capacity
utilisation 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 various
amendments, Nigeria is yet to have a stable economy. In the agricultural sector, there
is the problem of poor funding, high cost of production input in agriculture due to the
depreciation of the naira, the predominance of small holder agricultural activities etc.
5
6. The manufacturing sector remained hampered by high external dependence of the
manufacturing sector, low technological capability, low internal linkages among
industries, decay of infrastructural facilities, etc. The prospect of expansion of
Nigeria’s domestic production is still very high going by the abundant supply of
untapped natural resources, large domestic market, and growing number of trained
manpower.
It is therefore the aim of this study to look into the above problems of trade policies
in Nigeria especially between 1984-2011.
From the foregoing, the following pertinent research question becomes
imperative:
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 1984-2011
and find if these policies has engendered socio-economic and political
development/growth.
Significance of Study
The study is an empirical finding/assessment with a focus to the Nigeria trade
policies (1984-2011). We gave the background of Nigeria’s trade policy from 1960 to
present just to capture a clear picture of the real situation in Nigeria. This study
compliments other existing studies and also helps in advancing our knowledge on the
rudiments of Nigeria’s trade policies in general. The study aims at making some
generalizations 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’s
trade policy between 1984-2011 and find if these policies has engendered socio-
economic and political development/growth. The study is limited to trade policies in
Nigeria.
It suffices to note that the study suffers some limitations. First, the study
suffered slow rate of response from the respondents. Yet at the end of the exercise, we
were not able to retrieve all the questionnaires given to the respondents. Out of 1,200
questionnaires distributed, only 984 were returned. Second the study also suffered
from shortage of finance. A study of this nature requires enough funding if possible
6
7. from donor agency to ensure a comprehensive study. Third the unwillingness of the
ministry of economic planning, Abuja to release some basic information needed for
the study is another serious problem.
However, it must be pointed that spirited efforts were made to address some of
these 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 formulating
the policy which they think would be most appropriate for their country. The purpose
of trade policy is to help a nation's international trade run more smoothly, by setting
clear standards and goals which can be understood by potential trading partners. In
many regions, groups of nations work together to create mutually beneficial trade
policies. (http://www.wisegeek.com/what-is-trade-policy.htm)
Things like import and export taxes, tariffs, inspection regulations, and quotas
can all be part of a nation's trade policy. Some nations attempt to protect their local
industries with trade policies which place a heavy burden on importers, allowing
domestic producers of goods and services to get ahead in the market with lower prices
or more availability. Others eschew trade barriers, promoting free trade, in which
domestic producers are given no special treatment, and international producers are
free 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 for
economic development. For developing countries, the contribution of trade to overall
economic development is immense, owing largely to the obvious fact that most of the
essential elements for development such as, capital goods, raw materials and technical
know-how, are almost entirely imported because of inadequate domestic supply.
Since the currencies of this group of countries are not convertible, foreign exchange
has to be earned through exports to be able to pay for imports. Increased domestic
demand invariably solicits corresponding expansion in exports. To enhance export
capacity therefore, improved technology must be required, and this in turn further
pushes up demand for imports. This circle of activities has the tendency of pushing
imports far ahead of exports and in consequence exerts undue pressures on the
balance of payments. Prolonged pressures on the balance of payments constitute
7
8. constraints to economic development and thus, appropriate economic policy measures
have to be put in place to streamline external trade transactions to conform to desired
goal of economic development.
Trade Policy Trends Between 1980 - 1990s
From 1981, there was a policy shift towards exports promotion and a move to
intensify the use of local raw materials in industrial production. However, the increase
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 the
government to promulgate the Economic Stabilization (Temporary Provisions) Act in
April 1982. Under this Act, tariffs on 49 items were raised, while a prohibition was
imposed on gaming machines and frozen poultry. Further, 29 commodities were
removed 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 import
license, and foreign exchange regulations became more stringent. The central
objective of trade policy was to provide protection for domestic industries and reduce
the perceived dependence on imports; a corollary to that objective was a desire to
reduce the level of unemployment and generate more revenues from the non-oil
sector. Accordingly, tariffs on raw materials and intermediate capital goods were
scaled down.
The Structural Adjustment Era
From 1986, there was a significant shift in trade policy direction towards
greater liberalization. This shift in policy is directly attributable to the adoption of the
structural adjustment programmes. The Customs, Excise, Tariff etc (Consolidation)
Decree, enacted in 1988, was based on a new Customs goods classification, the
Harmonized System of Customs Goods Classification Code (HS). It provided for a
seven-year (1988 -1994) tariff regime, with the objective of achieving transparency
and predictability of tariff rates. Imports under the regime thus attracted ad valorem
rates 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 raw
materials, and on intermediate and capital goods, while tariffs on consumer goods
8
9. were slightly reduced. This was aimed at reducing distortions in resource allocation
and combating smuggling. Both the 1988 and 1995 tariff schedules had provisions for
reviews and amendments. However, they maintained the familiar mixed trends in
tariff regimes. Three types of changes were subsequently common, namely, reduction
in rates; increase in rates and/or removal from or addition to the import prohibition
list.
Trade Policy under the NEEDS Era (1999 - 2006)
As pointed out above, Nigeria's trade policy regime as currently contained in
the NEEDS and trade policy documents, has been geared to enhancing
competitiveness of domestic industries, with a view to, inter alia, encouraging local
value-added and promoting as well as diversifying exports. The mechanism adopted
to this end is gradual liberalization of the trade regime. Thus, the government intends
to liberalize the trade regime in a manner, which will ensure that the resultant
domestic costs of adjustment do not outweigh the benefits. This is the fundamental
basis on which to gauge the direction and implementation of policy. The clarion call
is "gradual liberalization". This addresses the question as to what is the kind of trade
strategy the government has adopted in furtherance of its development agenda.
Current reform packages are therefore designed to allow a certain level of protection
of domestic industries and enterprise. Concretely, this has translated into tariff
escalation, with high effective rates in several sectors and lower import duties on raw
materials and intermediate goods unavailable locally. This policy perspective has also
led to the application of relatively high import duties on finished goods which
compete with local production.
Nigeria's Current Trade Policy
Thus, as observed above, the Nigerian government like many other developing
countries, considers trade as the main engine of its development strategies, because of
the implicit belief that trade can create jobs, expand markets, raise incomes, facilitate
competition and disseminate knowledge. (WTO 2005: 15). The main thrust of trade
policy is therefore the enhancement of competitiveness of domestic industries, with a
view to, inter alia, stimulating local value-added and promoting a diversified export
base.
Trade policy also seeks (through gradual liberalization of the trade regime) to
create an environment that is conducive to increased capital inflows, and to transfers
9
10. and adoption of appropriate technologies. The government pursues the liberalization
of its trade regime in a very measured manner, which would ensure that the resultant
domestic costs of adjustment do not outweigh the benefits. The reforms which
accompany this policy direction are also aimed at re-orientating attitudes and
practices towards modern ways of doing business. However, the instruments of trade
policy such as the tariff regime are designed in a manner which allows a certain level
of protection of domestic industry and enterprise. While this is the main trade policy
framework to guide economic growth, the trade expansion, employment generation
and poverty alleviation dimensions are now subsumed in a new overarching economic
development policy blueprint adopted in 2003, the National Economic Empowerment
and Development Strategy (NEEDS).
In the trade policy area, NEEDS seeks to deepen Nigeria’s integration with the
rest of the world and to maximize the benefits of strategic integration. Accordingly,
regional integration and trade are the two instruments identified by NEEDS for
maximizing the benefits of globalization. The trade policy objective under NEEDS is
to lay a solid foundation for fully exploiting Nigeria’s potentialities in international
trade. While aspiring to the above, NEEDS has by no means overlooked the
challenges which have so far hampered the realization of these potentialities.
However, a number of constraints are identified, namely: the high cost of doing
business; inadequate infrastructure; poorly implemented incentives, especially in
regard to fiscal and tariff regimes; widespread smuggling, counterfeiting and
dumping; lack of standardization, required for products to compete internationally;
and unfavourable international trade rules Under NEEDS, the trade policy thrust is to
drastically reduce the uncertainty and unpredictability of the trade policy regime;
harmonize trade practices with those of other Economic Community of West African
States (ECOWAS) countries and hence facilitate full integration; respect obligations
under multilateral and regional trading systems; and create a conducive and
competitive environment in which Nigerian enterprises can thrive and effectively
compete in the global and regional economy.
Hypothesis
The Nigeria’s trade policy (1984-2011) has not contributed significantly to the
socio-economic and political development/growth of the country.
Theoretical Framework.
10
11. This study adopts the system theory to justify or advance its arguments. The
system theory was propounded by David Easton and it describes public policy as an
output of the political system. Trade policy is a part of public policy. The theory
conceives of political activity as essentially involving the environment, the political
system and output (Ikelegbe, 2006:36). The environment is where demands arises
and are placed on the political system. Demand of different kinds emanate in a
society and are expressed through various methods upon the political system.
The political system is made up of institutions, processes and government
personnel (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. The
authoritative allocations or outputs are the public policies. Public policies are the
reaction of the political system to environmental demands and pressure (Ikelegbe,
2006: 36).
The kind of society determines the kind of policy demands. In an autocratic
society, the policy demand will essentially be that of political reforms or demand for
democratization. The nature of the political system whether developed or developing
determines its ability to process accurately the demands from the environment. The
outputs which are public policies are continually responded to by the citizenry and
this is feedback to the system that brings about new policies or the modification of
existing policies (Ikelegbe, 2006 : 37).
All theoretical frameworks have its limitations and the system theory is not an
exception. Ikelegbe (2006: 37) observes that the theory assumes that policies are
environmental input converted by the political systems. It fails to recognize that the
characteristics of the political system itself may have considerable independent effect
on the content of policies.
Despite this, the system theory has the advantage of insights into the totality of
the 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
12. Consequently, both the primary and secondary sources of data collection were
explored. Primary sources of data were questionnaire instrument and in-depth
interview. The questionnaire instrument enabled us to elicit information on the
problematic which the study seeks to unravel. The questionnaire instrument was
structured along the close ended format and administered in such a way that made it
fairly representative of all shades of opinion and interests. This was complimented
with in-depth interview with some of the senior Civil servants in the federal
secretariat, 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, North
Central and North-East. A sample size of one thousand two hundred was originally
selected. The choice of one thousand two hundred (1,200) is informed by the
consideration of some human and financial face (Obasi, 1999). Also considering the
homogenous 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 sampling
in successive stages such that at each stage selection is made using any of the known
probability sampling methods (Biereenu-Nnabugwu, 2006). This was done to help us
save time and cost. In the first stage, the study adopted the stratified sampling
technique to get respondents from the six geo-political zones in the country. This was
to ensure a fair representation of all shades of opinion, interest and groups in the state
which could have been lost to the chance factor (Obasi, 1999). In using the stratified
sampling technique, the study further adopted the disproportional stratified sampling
technique in the sense that the numerical strength of the geo-political zones were not
considered 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, we
picked Anambra State, in the South-West-Lagos, in the North-West – Sokoto, in the
North-Central – Kaduna and in the North-East we picked Plateau State. The choice of
these major States is also based on two major reasons. First, there seems to be a very
12
13. high concentration of people in these States as a result of urbanization. Secondly, they
occupy important positions in the socio-economic and political setting of the country.
The presentation and analysis of data were carried out using both descriptive
qualitative and quantitative methods. While qualitative analysis was merely
descriptive and theoretical, the quantitative method employed appropriate statistical
tools 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 the
country. Although, the economic profile over the past few years shows relatively
stable exchange rates and fairly stable inflation trends (down from 18.6 per cent to
11.6 per cent in the last quarter of 2005). Fiscal deficits declined from 8.4 per cent of
GDP 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 has
more recently been observed in the exchange rate, which in itself is a disincentive to
investments in export oriented sectors. The uncertainty that has appeared to
characterize macroeconomic policy has led to the erosion of confidence within the
ranks of the international investor community. Frequent policy changes and weak
regulatory and institutional frameworks have not helped matters.
The steady rise in the price of crude oil has had its positive side, which is to
help build a sizeable foreign exchange revenue base; it has also proved to be a critical
factor 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 of
commodities, and also unable to meet the demands of domestic consumption of
petroleum products, has had to contend with increasing import prices, translating into
negative impacts on the poor. In the face of rising crude oil prices, the government
has consistently pursued a policy of deregulation of the oil sector, leading to periodic
hikes in the price of refined petroleum products. This has typically generated a
domino effect on commodity prices generally, i.e. foodstuffs, transport, housing, and
other 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
14. which when they target the poor, increase rather than reduce poverty levels in the
country. Given the dominance of crude oil in Nigeria's exports, oil price fluctuation
presents challenges to macroeconomic policies, with consequences on the
competitiveness of non-petroleum exports. Inadequacies in infrastructure (notably
roads, transport raised the cost of doing business. Critical among them is the serious
deficiency in the supply of electricity, which persistently defies solutions. A study on
the cost of infrastructure failure in Nigeria has indicated that respondents had ranked
power outages and voltage fluctuations as among the major obstacles to their
operations. The huge cost of production means that Nigeria’s manufactured goods do
not have the desired competitive edge in the international markets. As part of the
broad policy reforms especially in the area of privatization, port reforms are already
under way with the "Port Concessioning" exercise. The bottlenecks bedeviling
Nigeria’s port system are persistent, and the government's directive for goods to be
cleared within forty-eight hours after landing at port, is infrequently realized. In recent
times, 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 collateral
requirements. Long-term access to finance is scant, and so it is only the large
multinational firms that are likely to receive loans, while the small-scale entrepreneurs
are marginalized. Nonetheless, one of the NEEDS objectives is the enhancement of
the capacities of the SMEs.
Recommendations
From 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
15. 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.
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