Nigeria's Trade and Investment Drive
Post date: May 23, 2013 2:29:23 PM
Policies aimed at re-directing the nation's investment, trade, industry and enterprise potential may have started yielding results. If the trend continues, the Nigerian economy's dependence on crude oil alone will be halted. Oil had, unexpectedly, skewed the country's balance of trade in favour of its trading partners.
The United Nations Commission on Trade and Development's World Investment Report 2012 placed Nigeria as Africa's biggest destination for foreign direct investment in 2011, quoting total FDI inflows of $8.92bn. The Central Bank of Nigeria in its "Nigeria's External Sector Report 2012" said, "Nigeria's trade balance improved significantly from $8.62 billion in the second quarter of 2012 and $1.60 billion in the third quarter of 2011, respectively, to $12.37 billion in the third quarter of 2012. Within the same period also, aggregate exports rose by 8.2 per cent, from US$22.53 billion in the third quarter of 2011 to $24.37billion in the third quarter of 2012, while aggregate imports declined by 42.7 per cent to $11.99 billion in the review period."
The latest reports from the National Bureau of Statistics also showed that the value of export increased from N19, 440.4 billion in 2011 to N22, 446.3 billion in 2012. The Bureau said the increase in the value of exports contributed to the visible trade balance of N16, 821.4 billion recorded in 2012. The value of import within the period decreased from about N9.8trillion to about N5.6trillion by the end of 2012.That was a decrease of about 43 per cent in savings of more than N4.2 trillion.
The Ministry of Trade and Investment claims that it has been providing this push especially through its plan to develop institutions that will drive the country's industrialisation and desire to create an inclusive economic environment where jobs and wealth will be created in sectors where the nation has competitive and comparative advantage. In that case, the plan to make Lagos, Ibadan, Nnewi, Enugu, Kano and Kaduna the clusters in terms of the federal government's automobile programme should be pursued with utmost vigour and consolidated to avoid the fate that befell previous plans in this regard.
Noteworthy is the paltry favourable performance of the manufacturing sector in terms of capacity utilization: it went up from about 46 per cent to about 48 per cent between 2010 and 2012. Also, the textile sector, a major contributor to the increase in capacity utilisation, went up from 29 per cent to 52 per cent due, largely, to the cotton/textile loan disbursed to more than 50 textile companies at 6 per cent interest rate.
These policy thrusts that are yielding positive results should be pursued on a sustainable basis. Policymakers must guard against the tendency towards policy inconsistency and somersaults that have hamstrung economic growth and development of the country in the past.