Presentation Nigeria D

8/14/2019 Presentation Nigeria D

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Overview

Important changes of policies over the years

Interventions vary significantly among regions

and commodities

Taxation of export commodities

Tariff and non-tariff barriers on imports,

Budgetary payments


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Fundamental structural transformation of the economy


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Share of agriculture in Nigeria


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Agricultural production


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Agricultural production

Mainly root crops,

Since 1960 production of cassava quadrupled,

Yams production increased sixfold Below average production for traditional crops

(Cocoa, groundnuts, oil palm fruit, cereals,...)


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Four phases can be identified:

Phase I (1960s): export-oriented; fiscal revenuesthrough export taxation.

Phase II (1970 -1986): strong governmentalintervention; elimination of export taxes, reductionof import tariffs on agricultural inputs, guaranteedminimum prices, fertilizer subsidies, credit support

schemes Nigeria becomes large-scale importer ofagricultural and food products

Agricultural policy after independence


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Agricultural policy after independence

Phase III (1987 -1999): Government removes policies;

devaluation of the currency government wants to

enhance price competitiveness of export commodities and

import-competing goods

Attempts to diversify production and export base (through

non-fuel export subsidies) and improve self-sufficiency (via

import bans)

Phase IV (from 1999): Adoption of ECOWAS common external

tariff: reduction in import duties, agreement that Nigeria willabandon its special tariffs on sensitive products and

quantitative restrictions.


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Exchange rate policies

High petroleum prices Capital inflows due to oil industry

real exchange appreciation real appreciation of the

currency reduction of agricultural exports

OVERVALUATION OF THE CURRENCY

Substantial differences between official exchange rate and

black market rate: Constrains agricultural exports,

Protects domestic farmers as imports become tooexpensive.


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Border taxation

In order to achieve balance of payment the

government introduced import tariffs, export duties

and quantitative restrictions.


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Domestic market price support

1977: Reform of Marketing Boards; set

guaranteed minimum prices for maize, millet,

sorghum, wheat, rice and cowpeas

Little effects of official floor prices because

they were set to low


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Non-tariff measures

Import bans: In 2005, almost a fifth of all

products in the tariff schedule could not be

legally imported.

Frequent changes in trade regulations

Trade barriers in the logistic sector such as

long clearance procedures and high unloading

costs.


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Recent developments

Adoption of common external tariff (CET) in

2005 in order to reform trade policy.

Liberalisation with focus on agricultural

products that have seen high degree of

protection previously.

It is expected that import tariffs fall from 41 %

to 13 % increases relative purchasing power

of the poor!


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Summary

In Nigeria, during the pre-reform period trade

Policy and exchange rate management created

Significant disincentives for the agricultural

export sector. The sector was taxed explicitly

through export taxes and commodity board

Commissions and implicitly through industrial

Protection and macro-economic policies

Unfavourable to agriculture.


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References

Peter Walkenhorst (2007),Distortions to

Agricultural incentives in Nigeria: The World Bank

David Colman,Aja Okorie (1998) The effect of

Structural Adjustment on the NigerianAgricultural Export Sector: John Wiley and Sons

Iyoha M.A and C.O.Itsede (2002) Nigerian

Economy: Structure,Growth andDevelopment,Benin City: Mindex Publishing


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THANK YOU!

Documents

Presentation Nigeria D