World Bank dissatisfied with non-inclusion of import tariffs in 2010 budget
Category: World of Business
The World Bank has expressed dissatisfaction over Federal Government’s failure to capture import tariffs in the 2010 budget even after it had recommended that current import bans be replaced with tariffs to boost local production and consequently create jobs.
The bank thinks that Nigeria’s current trade policy which encourages import bans is ineffective as basically all prohibited items in the policy are being smuggled into the country, defeating aims of protecting local manufacturers. It would be recalled that the World Bank in a recent study to review of Nigeria’s recent growth performance, impact on the labour market and develop a sustainable growth strategy for Nigeria reported that about $2 billion worth of textiles are smuggled into the country annually, not reflecting the fact that there is any import ban on textiles.
Volker Trechei, lead economist of the World Bank told BusinessDay that they had expected that government would use the budget not only to introduce higher tariffs and remove import bans but also begin the implementation of Vision 2020 document as they advised.
“So the import bans should immediately be replaced by tariffs. We are very happy that the Vision 2020 document calls for the replacement of import bans by tariffs but we are very much disappointed that the 2010 budget right now does not include that, certainly, it doesn’t include change in the trade policy, that is bank’s opinion”, he told BusinessDay in an interview.
But apart from the tariffs, Trechei said the bank, based on his team’s findings had also recommended that government fix physical infrastructure, skills gaps, access to finance, investment climate which they see as binding constraints to growth.