Government Policies and Export Promotion by Professor Adeola ADENIKINJU

1. Government Policies and Export Promotion byProfessor Adeola ADENIKINJU

2. Outline • Introduction • Emerging Issues • Journey so far (Attempts and Outcomes) • The Challenges • Export Performances • Nigeria’s Experience • Lessons learnt and Plan for the future

3. Quotation • “We cannot afford to forget that public order, personal security, economic and social progress and prosperity are not the natural order of things, that they depend on ceaseless effort and attention from an honest, effective government, that the people must elect” Lee Kuan Yew (cited in Asiodu, 2013). • “The rise of the South has resulted not from adhering to a fixed set of policy prescriptions, but from applying pragmatic policies that respond to local circumstances and opportunities … and an openness to trade and innovation”. (HDR, 2013)

4. Quotation… • “Nevertheless, many of these countries have also begun to benefit from South–South trade, investment, finance and technology transfer. E.g. positive growth spillovers from China to other countries, particularly close trading partners”. (HDI, 2013) • “Today, as a result of reduced trade barriers and lower transport costs, the production of manufactures is fragmented across borders, with many countries trading intermediate goods… Changes in information technology have made services increasingly tradable. The result has been a remarkable rise in intra industry and intra firm trade”. (HDI, 2013)

5. Introduction • In spite inconclusive empirical evidence, export is seen as engine of growth • MICs view aggressive export performance as a channel to harness forces of globalization • HDR data confirms recent stellar performance of the MICs • MICs vary in terms of structure of economy, geography, endowments, and levels of development. Evidence reveals • dependence on resource-based primary exports susceptible to high price volatility • low to medium technology intensive manufactured exports • increasing trade, investment and capital flows among countries in the South

6. Introduction • trade patterns show a rising trend previously observed between the North and South countries • Between 1995and 1996, only 6 countries in the South has significant trade relationship with more than 100 countries • By 2006 that figure has climbed to more than 15 countries

7. Emerging Issues • What are the exogenous and endogenous determinants of exports performance? • Are trade policies independent of countries’ specific circumstances that then limit scope for imitation and replication of policies? • How to balance the roles of market and the state in economic development and export performance.

8. Journey so far (Attempts and Outcomes)

9. The critical challenge • Most MICs are still stuck in: • low technology • low skill • natural resource intensive • low productivity intensive technology manufactured production and exports

10. Other Challenges

11. Export Performances

12. Technology Manufactured Export

13. Composition of Technology Manufactured Export

14. Illustrative Example: Nigeria • Population: > 165 million (mostly youths) • Diverse and sometimes rancorous multiethnic groups • GDP - USD 242.4 billion (2nd largest economy in SSA) • Per capita GDP USD1,474 • Average GDP growth - over 7% (last 10 years) • Electric Power production 4120 MW (2013 figure) • 62% of population live below $1 per day

15. Nigeria: Facts • Structure of Economy (%), 2011: • Primary sector: 55 • Secondary sector: 6 • Tertiary Sector: 39 • Structure of Exports (%), 2011: • Oil and gas : 99% • Non-oil exports : < 1%

16. Nigeria’s Experience

17. Nigeria’s Experience Institutions and Policies for Export Promotion and Diversification

18. Nigeria’s Experience Institutions and Policies for Export Promotion and Diversification

19. Nigeria’s Experience Institutions and Policies for Export Promotion and Diversification

20. Nigeria’s Experience Institutions and Policies for Export Promotion and Diversification

21. Nigeria’s Experience Institutions and Policies for Export Promotion and Diversification

22. Results from World Bank’s Doing Business (Nigeria)

23. Lessons Learnt and Plan for the future • Lessons Learnt • Export policies cannot be effectively conducted outside overall economic development strategy • Unfavourable business environment • Plan for the future • Integrating sectoral planning, compared to the past where limited data affected quality of policy • Cluster-based approach to industrilaisation • Creating strong, efficient and effective public service institutions • Tackling corruption • Development of ICT and its promotion and diffusion across sectors of the economy • Incorporation of M&E formally into governance institutional structure

24. Recommendations • Review extant laws setting up export promotion agencies and address other inhibiting factors to export • Remove barriers to Doing Business • government should provide the supportive environment for entry and exit of business • Governance Issue • rule of law, respect for the sanctity of contract, property rights, efficient and prompt administration of justice, zero tolerance for corruption • Return to Planning and submission to the discipline of planning, respecting pre-determined priorities in the utilization of national resources. • Provision of adequate and qualitative Public Goods • Provision of Support Services • ICT, power, export market information services, aligning diplomatic and economic interests. • Concerted efforts by the MIC to influence the governance structure of institutions regulating global trade

25. Thank you