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New Normal: Nigeria Trade Policy In Post Covid-19 Pandemic

By Sand Mba-Kalu
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The outbreak of the novel coronavirus (COVID-19) is perhaps one of the most devastating public health crisis whose effect is currently reshaping the global economic landscape. In Nigeria, the crisis has triggered severe economic imbalances while the external sector is suffering a major contraction. Just like many other countries, Nigeria first measure to contain the spread of the virus was to restrict cross-border movement and labour mobility. The action has consequentially wedged on both domestic and international trade flow. The trade sector which accounted for 33.0 per cent of Nigeria's GDP in 2018 [1] and 16 per cent of 2019 GDP [2] is bound to further decrease in 2020 as recent statistic reveals. In the first quarter of 2020, the nominal year on year growth rate for trade stood at -0.27%. This indicates a decrease of –5.09% points when compared to the first quarter of 2019 [3] . These contracting trade figures combined with fall in the global oil price to as low as $11.26 [4] explains how significantly the country’s trade ecosystems had suddenly become pale and gloomy.

In response to the effect of the pandemic, the federal government initiated some vital policy reforms to support economic growth and job creation over the medium-term in specific sectors. However, up to the time of this report, there is no known consolidated trade policy document on international trade. Most of the policies on trade are sparsely scattered in various development policy documents. Never the less in response to the crisis the government made post-crisis decisions through the Central Bank of Nigeria (CBN). The federal government noted that some MSMEs would access NAFDAC registration at 80% discount [5] over a period of six months. As part of the policy, CBN resumed the sales of dollars denominated currencies to SMEs for essential imports and forex restriction for the importation of items that could be produced in Nigeria [6] .

With the uncertainty of the long-term economic impact of the pandemic, even though economic activities are gradually returning, it has become quite imperative for Nigeria to have a consolidated trade policy that factors in the likely adverse effect of the pandemic in both short and long term. A new trade policy orientation that is resilient and robust is very crucial to possibly avert the already forecasted negative growth rate of -7.4 percent [7] at the close of 2020, and the recession which is expected to extend to 2021. It is noteworthy to emphasis that the speed and sustainability of Nigeria's economic recovery will be predicated upon the effectiveness of government institutions saddled with the responsibility to design an inclusive, comprehensive and pro-private trade policy thrust and direction for the country.

You can access the full report on the Trade Policy Brief here, including recommendation on the actions the government and private sector should adopt. :

http://africainternationaltrade.com/new-normal-nigeria-trade-policy-in-post-covid-19-pandemic/

For more information and clarification
Sand Mba-Kalu
Africa International Trade & Commerce Research

Tel: +2349074690373; +234 8147429461; +2349058603907

Abuja, Nigeria
Em: [email protected]

Tw: @Africatradelink
Fb: www.africainternationaltrade.com/africainternationaltrade

LinkedIn: Africa International Trade & Commerce Research

Website: www.africainternationaltrade.com