In the May edition of Nigeria’s Global Performance Index (GPI) Bulletin, the Group Director of Advocates for Positive Development, March Oyinki, x-rays the country’s trade policies, identifying government inaction, regulatory lapses and poor enforcement as reasons for the dumping of substandard imports in the country that often have no replacement parts nor services centers in the country.
The three leading destinations for substandard imports in Africa are Nigeria, South Africa and Kenya.
Nigeria is leading, followed by South Africa and Kenya in second and third place respectively. According to the Ships and Ports report of July 2024, the Director General, Standards Organisation of Nigeria (SON), represented by the Director, Product Certification Department, Engr. Onochenyo Enebi, buttressed during the Product Authentication Mark (PAM) scheme in Lagos that Nigeria is a leading destination for substandard imports in Africa.
China is one of the three leading import trade partners with Nigeria with a trade volume of about $12.9 billion. The Netherlands follows with over $5 billion, and India is third with about $4.6 billion.
A significant portion of Nigeria’s imports, including raw materials, clothing, mineral fuels and oils, vehicles, electrical machinery and equipment are sourced mostly from China.
In its 2024 report, Statista said in the African countries with the highest Gross Domestic Product (GDP), Nigeria ranked 185 out of 209 countries in the world with imports per capita of $300 in 2023.
African economies are among some of the fastest-growing economies in the world and South Africa is top in Africa with a GDP of over 403 billion U.S. dollars in 2024.
Egypt ranked second with a GDP of about 380 billion U.S. dollars. Algeria ranked third, with about 260 billion U.S. dollars and Nigeria ranked fourth, with about 199 billion U.S. dollars.
The results of poor trade policies on the country’s economy are saliently manifest in the slow growth of the economy. Trade has enormous potential to stimulate economic growth through policy frameworks that drive competitiveness, job creation and poverty reduction.
The apparent absence of these critical enabling trade laws in the country makes it mandatory for the government regulatory agencies to give it the urgent attention it deserves.
The failure to harness and drive purposeful trade objectives with the intent to create the right business climate and drive economic development in the country is the main reason the country has remained the global dumping ground for obsolete and unregulated import of automobiles as well as electronic products from our global trading partners.
The government’s weak trade policies and ineffective import regulations allowed into the country all kinds of substandard products, most of which brands do not have offices and neither do they have retail sales outlets for replacement parts, nor do they have the necessary service centers.
In line with these expectations Dr. Doris Uzoka-Anite, then Minister of Industry, Trade and Investment, announced the Trade Policy of Nigeria (TPN) 2023-2027, in Abuja on December 15, 2023.
The focus of the Federal Government, according to the minister, was to accelerate pro-poor growth through market-oriented policies in accordance with the WTO rights and obligations to creating a fair and equitable platform for enhancing the country’s participation in global trade.
Sound economic policies by the Federal Government aimed at improving its share of global trade is key to economic prosperity and industrialization.
Nigeria’s comparative low import per capita is quite avoidable given the country’s large population and market advantage. The country also has enormous potentials it could explore to dramatically improve its world trade ranking, enhance its performance and increase the trade sector contribution to Nigeria’s GDP.
Policy interventions and trade regulations such as these by the government will not only create employment opportunities, it will also tremendously improve the quality and availability of original replacement parts, especially, for automobile and electronics products, and equally address the perennial issue of scarcity of original replacement parts, thereby, tremendously boost the growth of the replacement parts business in the country.
The bilateral trade agreements Nigeria has with its global trading partners presents it with enormous opportunities to build better trading relationships with the aim of improving the country’s imports per capita through strategic policy formulations and trade regulations targeted at driving the nation’s economy. Government policies and regulations are an important and vital legislative instrument for creating a conducive trade environment that can promote economic growth and prosperity in the country.
It requires engendering a deliberate policy framework that focuses on increasing foreign investment, competitiveness, job creation and economic prosperity, such that all automobile and electronics importers, and brand representatives must establish service centers for repair of defective and damaged products as well as establish retail outlets for original replacement parts.
It would make enormous impact if the federal government ensures all the relevant trade agencies begin the enforcement of existing trade regulations as it concerns import, and where there are inadequate trade laws to address these concerns, the government should enact new policies to ensure market protection by requiring all trading partners and brand representatives to open retail outlets for replacement parts and service centers in any location in the country where they have brand presence or where they market their products.
By identifying and making significant policy reforms and by ensuring improved compliance with all the existing trade regulations, it will help to place the country in a position to attract increased foreign investment that will create new jobs in the automobile, electronics and other key sub-sectors. By these measures the Federal Government would be able to achieve rapid and substantial economic growth, and prosperity in the country.
