By Stanley Opara

The World Bank has urged Nigeria to reassess its trade policies and consider a relatively open economy, considering the merits of a competitive economy.

The Country Director, World Bank, Mr. Onno Ruhl, said this at a stakeholders’ forum on trade and tariff policies, organised by the Lagos Chamber of Commerce and Industry, in Lagos on Friday.

“Lack of competition brings complicity and in the long-run a closed economy will not make the country great,” he said.

Speaking on the Federal Government’s recent move to further regulate activities at the borders, he said a lot of thinking should be done before policies were made so that the multiplier effects would not be negative.

Ruhl, however, urged the government to fortify its anti-dumping mechanism, explaining that instead of outright ban on some goods, higher tariffs could be charged so that such goods could legitimately come into the country. He said, this way, more revenue would also be generated for government while smuggling activities would be reduced.

He said, “People invest based on a country’s policies. On trade policies, for instance, there should be effective follow-up and monitoring by government to ensure that the policies are followed to the letter.

“With these, it would be in Nigeria’s interest to have a level of protection for trade with some countries of the world, considering the disparity in economic variables like wages, labour and productivity, among others.”

The World Bank director said Nigerians paid more to consume banned goods. “Nigerians pay over 70 per cent higher to consume banned goods, thereby defeating the purpose for which the goods were banned in the first place,” he said.

Ruhl, therefore, noted that for smuggled goods, the over 70 per cent difference went to smugglers as incentives while the cost was borne by consumers, who had appetite for the banned goods.

The President, LCCI, Chief Femi Deru, said if there was any policy to be considered as regards policy instability, it was the country’s trade policy.

Deru said, “The policy summersault is enormous. In particular, there are serious issues in the following areas: import prohibition (frequent listing and delisting), inconsistency in tariff policies, and challenges with economic integration in the West Africa sub-region, especially with respect to tariff and non-tariff barriers.

He said policy instability in the above areas created problems for planning and could also aggravate business risk.

The LCCI boss noted that there were conflicting positions on many trade policy issues, even in the private sector. but he added that there was the need for a very clear understanding as regards policy direction.

He said, “The most recent evidence of policy summersault was the removal from the import prohibition list, such items as textiles, furniture and toothpicks and the increase in the age of cars that can be imported into the country.

“Within two months, this policy was reversed. This also underlines the need for improvement in the consultative processes in policy making.”

Source: Punch