Transcript
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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!
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