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.

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

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)

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

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.

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

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

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

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

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.

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.

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

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;

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

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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