Introduction
Nigeria remains a government-led economy, meaning government policies have a direct and immediate impact on all sectors. Understanding the broader economic context is crucial.
● Ease of Doing Business: Nigeria ranks 131 out of 190 economies (World Bank, 2022).
● Naira Value: The Naira is gaining value (1 dollar = ₦1265), but the sustainability of this is uncertain.
● Economic Structure: Nigeria is still heavily reliant on oil (81% of exports).
Policy Coherence and Recent Policy Issues
1. Export Prohibition Act: Recently reintroduced by the Nigeria Customs Service, affecting various sectors.
2. Export Licences: Reintroduction of export licences with renewal based on repatriation of export proceeds.
3. Denominating Exports in Naira: This contradicts the definition of exports, which should involve foreign currency transactions.
The Business Facilitation Act (BFA), 2023
● Consolidates seven years of PEBEC-led reforms.
● Aims to improve the ease of doing business and streamline business operations.
● Modifies 21 business-related laws to eliminate bureaucratic hurdles.
Policy Implications
1. Export Prohibition Act:
● Initially banned certain food items and raw materials to boost local processing and value addition.
● Recent amendments extend the ban to all food items to address food shortages.
2. Re-Introduction of Export Licensing:
● Export licenses now require proof of repatriated proceeds from the previous year for renewal.
3. Denominating Exports in Naira:
● Exports should involve foreign currency transactions to qualify as exports.
Export Related Policies: Case Studies
● The Export Prohibition Act restricts the export of certain goods, impacting various industries.
● Non-oil exports are crucial for Nigeria’s economy, and supportive policies are necessary.
Final Notes
1. Prohibition Concerns: Export prohibition is undesirable and anti-WTO, potentially leading to retaliatory measures from other countries.
2. Executive Order for Non-Oil Exports: Calls for prioritising non-oil exports to boost foreign exchange earnings.
3. Research and Policy Formation:
● Emphasise research to improve product quality for international markets.
● Adopt an inclusive policy formation process involving various stakeholders.
● Streamline and coordinate policies across different agencies for effectiveness.
Conclusion
Strategic and coherent policies are essential for Nigeria’s economic stability and growth. The Business Facilitation Act and other reforms aim to improve the business environment, but ongoing issues like export prohibition and denominating exports in Naira need addressing. Effective collaboration and research are vital for developing policies that support non-oil exports and overall economic diversification.
