1) Before the introduction of structural adjustment programme in 1986 and even after, Nigeria is faced with unfavourable balance of trade with most countries of Europe, America and Japan.
2) This may be attributed to, among all other things, the fact that the country has relied too much on oil as it major exports and source of revenue earner which becomes very manifest during the oil boom of 1974 to 1979. Unfortunately the oil glut of 1980 greatly reduced our revenue base and this adversely affected our balance of payments position.
3) The data and figures supplied by the Central Bank of Nigerian for the month of April, 1988 show that outflow of funds was 50 million dollars more than inflow from trade which was 11.36%.
The total inflow for that month was 440 million dollars as against the outflow of 490 million dollars. In the previous month of March 1988 there was a total inflow of 496.81 million dollars as against total out flow of 515.20 million dollars. The story is similar in February and January 1988. But in 1987, the carrying stood at 5.45 billion dollars as against outflow of 5.25billion dollars.
4) Non-oil exports have been minimal since 1974, i.e. period of oil boom. In April 1988, $2 million dollars was received in respect of non-oil exports which were the lowest since government began its campaigns in 1986 to boost non oil exports under S.A.P.
5) Under SAP, a new council called Export Promotion Council has been formed to encourage general exports of non-oil goods.
6) Trading partners: Most West African countries concentrate their trading activities with Europe, America, Japan, and recently Far East. This is as a result of the fact that all African countries are exporters of raw material and importer of finished products.
7) New trends: New trend is being initiated by ECOWAS. This is to encourage trade among member countries.
8) Nigeria is striving at bringing about a diversification of its exports and to bring about increased earnings from non-oil commodities. Emphasis is on manufacturing for exports and encouragement of exports of agricultural goods.
9) Import substitution: While trying to increase exports earnings, efforts are being made to increase imports substitution because of the huge debts that accumulated over the years which leads to balance of trade and payment problems in the economy.
10) The growth rate in exports of non-oil goods has been about 3%per annum since 1996 as a result of several structural reforms.
4.0 CONCLUSION
As an integral part of the international economy, the Nigerian economy has not been free from the global crisis of capitalism. The Nigerian economic crisis for the 1980s derived mainly from the dependent and weak position of the country within the international economic system.
Furthermore, the Nigerian economy, like any other developing economies, has operated within a rather hostile international environment characterized by worsening terms of trade, increasing international protectionism, and external debt.
In the light of these features, the case for diversification of the export trade is even stronger today than it was many years back. It is important for the current export promotion strategies to be re-focused in favour of manufactured exports. This would require incentives such as a stable and realistic exchange rate, export subsidies, cheap credit, low cost of production and adequate infrastructural facilities.
5.0 SUMMARY
Differences in natural resource endowment, climatic condition and level of technological know-how made trade between different countries indispensable and inevitable. Apart from being an important stimulus of economic growth, it tends to bring about higher standard of living and promote economic development. Inspite of the advantages of international trade, it could have serious damaging effect on infant industry, balance of payments position, etc.
Nigeria is faced with unfavourable balance of trade with most countries of Europe, America and Japan. This may be attributed to the fact that the country has relied too much on oil as its major exports and source of revenue.
6.0 TUTOR-MARKED ASSIGNMENT
Inspite of the relevance of international trade in the economic growth and development of Nigeria, there are certain impediments. Discuss
7.0 REFERENCES/FURTHER READING
A. S. O. O. (nd). Nigerian Economic Crises, Causes and Solution.
C.B .N. (1994). Annual Reports and Statement of Accounts.
Kindleberger C.P., International Economics,
Sodersten, B.O. (1985). International Economics. Second Edition, Macmillan.
MODULE 3
Unit 1 Structural Adjustment Programme in Nigeria Unit 2 Financial System in Nigeria
Unit 3 Educational Sector in Nigeria
Unit 4 The Health Sector in the Nigerian Economy Unit 5 Nigeria's External Economic Relation