The World Bank has said that the protectionism ambition of the United Kingdom, the United States, and China poses a threat to the Nigerian economy.
The bank said it would affect Nigeria’s export and investment inflow.
The impact on Nigeria: The withdrawal of Britain from the European Union and the trade war between China and United States place Nigeria’s export demand and investment inflow in a critical position.
It was stated that the agenda could limit demand for Nigeria’s exports, resulting in the reduction of Foreign Direct Investment. This, the Word bank said, would affect the growth of Nigeria’s economy.
These countries’ actions are born out of determination to protect their local manufacturers and businesses against the saturation of foreign goods. Countries restrict or restrain international trade through actions and policies to limit foreign competition, which might also affect jobs.
While the Brexit plan has been delayed since the vote to leave EU won the 2016 referendum, the victory of pro-Brexit Prime Minister, Boris Johnson, has made the ambition more visible. And The United States and China’s trade war still lingers.
“The prolonged trade dispute between the United States and China and the ongoing uncertainty surrounding Brexit are generating anxiety about resurgent protectionism, which may adversely affect growth prospects both in Nigeria and worldwide.
“Moreover, Nigeria’s crude oil faces heightened competition from rising US production of light crude, which could cut into demand for Nigeria’s key export,” World Bank said in a Punch report.
Nigeria also a protectionist: President Buhari is also a protectionist seeking to protect local manufacturers through the closure of the country’s land borders. Although one of the motives is to stop smuggling, it is also to curb the monopoly of foreign goods.
This has affected trading relationships with neighbouring countries and other trading partners. Vietnam and Ghana had sent representatives to interface with Nigeria when the revenue of companies like Alomo Bitters and foreign rice producers began to take a hit. The closure has also led to retaliation against Nigeria by Ghanaian traders.
The government, through the CBN also initiated the policy to stop Foreign Exchange (Forex) for the importation of food into the country. According to the CBN’s Director, Corporate Communications, Isaac Okoroafor, the implementation started since 2015. It started with the exclusion of 41 items. Subsequently, others were included. Now the CBN policy has eliminated all sorts of food imports which it thinks can be easily produced in Nigeria.