The Centre for the Study of the Economies of Africa (CSEA), a research-oriented think-tank organization committed to analyzing Africa’s economies’ performance and constraints, has canvassed a multi-pronged economic policy approach to reversing Nigeria’s commodity balance of trade deficit.
Listing the merchandise trade policy imperatives in its just published ‘Nigeria Economic Update Issue No 3’ sourced by our correspondent on Tuesday, the economic think-tank group in its analysis of Nigeria’s merchandise trade noted that Nigeria’s commodity terms of trade, which reflects the amount of imported goods an economy can purchase per unit of exported goods, fell by 2.33% between July and September last year.
According to CSEA, the period’s unfavourable terms of trade indicates a fall in the export prices/value of vegetable products to other African countries and Europe while the import index increased by 2.48% due to an increase in import prices of a host of raw materials, including base metals, stone, plaster, cement, asbestos, mica, ceramic, plastic and rubber.
The organization recommended that for Nigeria to achieve a more favourable balance of trade, the government must initiate and implement policy measures necessary to enhance the quality of exported goods, particularly agro-processed commodities as well as invest in technologies that will help preserve vegetables and other perishable export commodities.
In addition, it advised the Nigerian government to focus on measures that will help develop the nation’s major high-potential raw materials industries, namely plastic, solid minerals and mining industries. The researchers stated: “Achieving a more favourable balance of trade will require measures to boost export competitiveness alongside curb imports. Enforcement of sanitary and phytosanitary measures as well as improving the preservation of vegetable products will improve the export capacity of Nigeria’s vegetable products.
“On the other hand, focus should remain on developing the high-potential raw-materials industries such as the plastic, solid minerals and mining industries. Local companies in these industries should be incentivized through increased funding and protectionist policies”, the centre advised.
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