The reduction in trade barriers, including the necessary implementation of Economic Community Of West African States (ECOWAS) trade rules which could affect Nigerian industry, and foreign exchange restrictions are sparking concerns among Nigerian businesses, according to Nigeria Politics & Security.
While demand for Nigerian oil remains weak on the international markets, non-oil sectors of Nigeria’s economy face their own difficulties again partly caused by international developments. For example, Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) officials are now complaining at the effect of Naira devaluation and Central Bank of Nigeria (CBN) cessation of its ‘RDAS’ foreign exchange window on the financial viability of their members.
They, and representatives from smaller associations, have called for President Muhammadu Buhari to intervene. Others such as rice importers facing recently announced CBN restrictions of foreign exchange will surely not dampen their voices.
The other side of the import equation is illustrated by the ongoing Nigerian implementation of ECOWAS trade rules, under the controversial ‘common external tariff’ (CET) rules. This means, according to a Federal Government announcement earlier this week, that restrictions on imports of textiles, among other goods, have been removed. Even though, for example, these goods should in theory pay 35% duty along with another ‘adjustment’ levy to enable greater protection of local businesses and manufacturers, local producers may be concerned.
The recently released National Bureau of Statistics (NBS) first quarter 2015 figures, which shows import composition dominated by consumer and capital goods, illustrates Nigeria’s potential predicament. LCCI officials acknowledge the lack of Nigerian ‘competitiveness’. This is illustrated by the NBS figures and those showing that Nigerian exports are overwhelmingly primary goods, although officials cite the unreliable and costly power supply as a major driver of the weakness.
Nigerian wariness of foreign competition is also illustrated in the airlines sector, which was one of those affected by the recent fuel crisis. As International Air Transport Association (IATA) chief executive Tony Tyler calls for reduced or removed aviation taxes and speeded implementation of a Yamoussoukro plan to allow greater African airline access continent-wide, local Nigerian airlines have called for regulation to limit foreign airlines to Lagos airports rather than allowing these airlines to land at Abuja, Port Harcourt and others. These Nigerian officials cite both the threat to domestic Nigerian airlines, and foreign airlines’ alleged role in capital ‘flight’ to justify their request.