THE IMPACT OF NIGERIA IMPORT RESTRICTION ON THE ECONOMY
BACKGROUND OF THE STUDY
The Nigeria economy has undergone structural changes in the past three decades form a predominantly agricultural economy in the 1960s to an economy mainly reliant on oil form the mild 1970 the result was that the consumption to rationalize imports when the oil boom gave way to an oil glut led to the emergence of trade arrears. A growing debt burden also surface in the early 1990 as a result of jumbo loans acquired form the international capital market.
Most less developed countries including Nigeria have turned to import substitution policy in order to become self-sufficient and to help develop indigenous industries that will need raw materials in order to production these products most of these imputs are not locally available.
Consequently the industries depends heavily on imported inputs of raw materials machinery capital equipment and general consumer goods it requires therefore a complementary development in the agricultural sector which provides the earning necessary to finance the minimum level of imports required to sustain the continued growth of the local industries.
Unfortunately the policies adopted to reserve the market for the domestic product primary tariffs is some how based in its effects against production for export countries who rely on import substitution as a means of developing their economics the system of protection is adopted and consist primarily of the use of import restrictions which take various forms including outright ban or total prohibition of imports high import duties or tariffs in the form of complicated customs administration or the placing of specific commodities on license. These restrictions are used either to shut out competition entirely or its give domestic producers a significant cost advantage our foreign producers the scope of this paper covers the year between 1995 and 1999 the focus as on the impact of restrictions or measures introduced by the federal government during these years and whether these measure have actually achieved their primary objectives.
STATEMENT OF PROBLEM AND PURPOSE OF STUDY
most developing countries like Nigeria which depend more on importation has been affected strongly due to the import restriction on the economy. For the fact that the standard of living of the economy is proportional to the rate of importation of goods into the country. One of the greatest impact of restricting importation in the country like Nigeria will be gradual declining of the standards of living. Which we known that its efficacy will result to many adverse effect such as increase the death rate fast decrease in population emigration and other effect which may come up later on the course of this project.
For this purpose this project seeks to identify the impact of Nigeria import restriction on the economy and to discus its effect on industrialization market and other commercial areas. Also to ascertain the volume and the structures of these effect on the standard of living of Nigeria citizens
OBJECTIVES OF THE STUDY
The broad objective of the study is;
- To examine if import restriction has any impact on Nigeria’s economy growth and to see if it impacts positively or negatively.
- To examine the factors that hinders the success of import restriction in Nigeria
- To examine also the trade policies i.e. restrictions Nigeria has imposed on import restriction and how favorable such policies has been.
- To examine the impact of the exchange rate system in Nigeria
- To make necessary policy recommendations based on the findings of the study.
- STATEMENT OF HYPOTHESIS
The research hypotheses to be tested in the course of this study are as
- H0: That import restriction does not contribute to the growth of the Nigerian economy
H1: That import restriction does contribute to the growth of the Nigerian economy
- H0: Exchange rate in Nigeria does not impact positive on GDP
H1: Exchange rate in Nigeria does impact positively on GDP
1.6 SIGNIFICANCE OF THE STUDY
This study is significant because import restriction is important in any economy as it is seen as one of the engine of economic growth and so it is important for us to view the ways on how we can maximize the benefits and minimize the loses from import restriction. Also this study will be useful to policy makers as it gives them an insight of the volume of trade thus assisting them to make policies which will exert positive influence on the balance of trade. Also the study is helpful to manufacturers, exporters and importers as it helps them to be aware of the policies on import restriction, exchange rate and the degree of openness of an economy. The study is useful to foreign partners as this provides information on our resources and it presents us to them as an economy who is doing well internationally and this will help increase foreign investment which will aid economic growth. This study is useful to researches as it provides an econometric evidence of the impact of import restriction on the growth of the Nigerian economy. Finally the study would also statistically enrich and add to the existing body of knowledge in the area of import restriction and its contributions to the economic growth of Nigeria.
1.7 SCOPE AND LIMITATION OF THE STUDY
For us to get a full insight into the study, we have to make use of economic data ranging from 1980-2016 as we tend to view the era of oil boom, oil glut, Nigeria’s external trade performance, her economic growth performance over the years and her recent participation at the world market. This study will be broad as possible as various articles and journals will be used to examine the volume of trade, exchange rate, degree of economic openness, inflation rate and gross domestic product.
A major constraint of this study is the insufficient time involved to complete the study and the problem of inconsistent and inaccurate data will give wrong results leading to wrong policy making.
THE IMPACT OF NIGERIA IMPORT RESTRICTION ON THE ECONOMY