Nigeria’s sub-regional exports now $6bn, says IMF

(The SUN) - The International Monetary Fund (IMF) has ranked Ni­geria’s exports to Economic Community of West African States (ECOWAS) member-countries to a whopping $6 billion between 1990 and 2013.

The increase, which indi­cates a sharp improvement from $1 billion as at 1990, was contained in the global financial body’s 2014 Article IV Consultation Staff Report.

The report, in appraising the regional Common Exter­nal Tariffs (CET), which was earlier scheduled to take off last January 2015, but later shifted tothis month, also in­dicated that the development would significantly reduce incentives for informal trade and simplify customs proce­dures, thereby increasing re­corded trade volumes.


“Under the new trade re­gime, billed to commence on January 1, 2015, five per cent duty is applicable for 2,146 tariff lines under the basic raw materials and capital goods category; 10 per cent for the 1,373 tariff lines that qualify as intermediate products cat­egory and 20 per cent duty is reserved for the 2,165 tariff lines that fall into the category of final consumer products.

“The CET will improve the transparency and coherence of the tariff structure of Nigeria, increase formal trade ties with other ECOWAS countries and reduce incentives for informal trade in the region.

“Moreover, the slowdown in Nigeria will adversely af­fect informal exports to Ni­geria. Anecdotal evidence indicates that goods that are subject to import restrictions in Nigeria have become key export goods for neighbour­ing countries.

Those informal exports to Nigeria are important sources of income for some neigh­bouring countries and out­ward spillovers may be non­trivial,” it said.

It said growing cross-border activity of Nigerian-based banks has increased the scope for spillovers through financial channels, along with regulatory and supervisory challenges.

The report further stated that the depreciation of the exchange rate would add to inflation, reflecting the pass-through of higher domestic prices for imports, but the ef­fect is likely to be contained, in part, due to lower food prices from increased local production of staple food crops.

The IMF said low fiscal and external buffers, which have reduced the capacity to absorb shocks relative to the experience of the 2008-09 fi­nancial crises, compromised the outlook.
The lender said the govern­ment expressed its determina­tion to implement appropriate measures to manage risks.

“They agreed that the oil price shock is significant and, at least in part, permanent, but saw a smaller effect on economic activity than staff, owing to measures targeted at sectors critical for growth (agriculture, power, small en­terprises) and the impact of remittances. They noted that rising food self-sufficiency would limit the pass-through to inflation and activity in housing construction would continue,” it said.