I've always been against the long list of Nigeria's import prohibition. How can they ban alot of stuffs from import when there are very few local manufacturers that can manufacture enough for Nigeria? Even the few local manufacturers around suffer alot due to lack of basic infrastructures. What is the rationale for the long list of prohibited imports when they fail to help the local manufacturers to manufacture enough for the nation?
These politicians have fish brains.

                                                    Long list of banned goods promotes corruption in customs – World Bank

[b]A World Bank study on Nigeria’s restrictive trade policy has revealed massive corruption and ineptitude among Nigerian customs officials. This is due to the long list of banned goods which has facilitated substantial smuggling and consequent rent seeking by Nigeria’s Customs and Excise.



The study, which noted the current restrictive trade policy and tariff differentials with neighbouring countries, explained that this has created strong incentives for traders and importers to smuggle goods from neighbouring countries - a situation which has enriched the private pockets of customs officials.

Estimating the amount the country may have lost to this scourge, the world financial apex bank calculates that about N600 billion cargo of banned goods pass through the face of Nigerian customs and enters Nigeria’s market unofficially from Cotonou, the capital of Benin Republic, alone. The figure represents up to 15 percent of Nigeria’s annual imports.

Nigeria is one of several countries with a long list of banned goods which the World Bank report says provide strong incentive for fraud and corruption.

“Whenever tariff duties differentials do exist between two neighbouring countries, the tariff wedge provides opportunities for customs officials to extract rents from imports and smuggling,” it stated.

According to the report, if trade restrictions would be adjusted to limited products,

then over N60 billion, or a quarter of the current revenues collected by the Nigerian customs could be collected on top of the current revenues. 

It maintains that existing trade policies in Nigeria have a deteriorating effect on revenue collection due to their complexity and restrictive nature. “They provide opportunities and incentives for smuggling, thus leading to substantial loss in revenues and rampant corruption,” it stressed.

Though Nigeria’s trade policy is based on tariff protection in order to stimulate production diversification and encourage increase of non-oil added-value, the bank argues that this protection has not worked in some sectors, especially textile, due to smuggling and other factors.

During the Olusegun Obasanjo administration, a long list of prohibited goods and bans was introduced for most manufacturing goods, such as textile products, footwear, plastic and leather articles. In February 2008, 968 tariff lines were subjected to import bans, up from 944 lines in November 2005.

The World Bank report, conducted by its officials in the transport section, admits there is little evidence, however, that the high tariffs on product-specific imports and non-trade barriers have helped local industries and the economy itself.

“Instead, the bans have proven to be difficult to enforce and have encouraged smuggling through Nigeria’s porous borders,” the report insisted.

A focus on the textile industry by the report which also relied on local analysts, revealed that the almost permanent bans on textile product import did not create the anticipated production and export growth, in most cases.

It says that despite the almost permanent bans, output and employment have performed poorly.

The report recalled that the textile industry which started out strongly and constituted a large percentage of Nigeria’s manufacturing sector, accounting for 27 percent of home textile market and 72 percent of West Africa’s textile production, has now suffered a serious decline. “The size of the industry declined from 175 firms at its peak in the mid-1980s to only 10 factories in stable condition in 2004. Employment fell from 350,000 to 40, 000,” the World Bank report added.

While arguing for a reduction of the long list of banned products, the report emphasized that the success of domestic production is not simply contingent on restrictive trade policy; it added that domestic producers are sensitive to more than just trade policy. They are also sensitive to issues such as power supply and transportation.

It stated that while the trade policy can serve as an important tool to boost economic growth, it may not be the most relevant.

Apart from corruption, which the long list of banned goods engenders, the report says the current trade regime also undermines Customs officials’ willingness to tackle reforms in the Customs Service. This has resulted in increasing costs to Customs to carry out its operations to detect smuggling activities especially at the border with the Benin Republic.

It calculates that officially, 13 percent of Cotonou Port traffic is destined for Nigeria. But unofficially, 75 percent of containers at the port are actually estimated to be headed for Nigeria.

The report further explained the smuggling process: In the export country, goods are declared exported to Benin. When goods arrived at Cotonou Port, final destination of goods is changed to Nigeria midway by producing revised papers.

Source: http://www.businessdayonline.com/NG/index.php?option=com_content&view=article&id=16173:long-list-of-banned-goods-promotes-corruption-in-customs-world-bank-&catid=76:hot-topic&Itemid=564
[/b]

@poster,
i did not read and am not reading your topic but i just want to inform you that if dora catch u with u calling nigeria - naija.
if u know what is good for u, run, go and change that name or have dora to contend with. do not say i did not warn u.

It will still benefit Nigeria in the long run,forget about today,think about tommorow,today,s leaders are all rent seekers and only few made money without cheating the system.Tommorow,s leaders will benefits from this policies once they begin to provide infrastructural development.Why should we import chicken,toothpick,water,secondhand cloths.Forget about does world bank people and stop quoting them as if you are making sense.

Our poverty  in Africa is tied to the propserity in the west,if you want it to continue ,then you are not fair to us.We cannot wear their cloths,eat their food and construct our houses with materials from them,it will not take us any where this are basic things of life.

olas2u:

It will still benefit Nigeria in the long run,forget about today,think about tommorow,today,s leaders are all rent seekers and only few made money without cheating the system.Tommorow,s leaders will benefits from this policies once they begin to provide infrastructural development.Why should we import chicken,toothpick,water,secondhand cloths.Forget about does world bank people and stop quoting them as if you are making sense.

Our poverty  in Africa is tied to the propserity in the west,if you want it to continue ,then you are not fair to us.We cannot wear their cloths,eat their food and construct our houses with materials from them,it will not take us any where this are basic things of life.

[b]@Olas2u: Import prohibitions normally become necessary when imports dwarf the competitiveness of local manufacturers. In most cases, these bans are done to protect local Organisations from going out of business.
In Nigeria, the situation is that the local production businesses are almost non-existent. This is not because of the intensity of competition from cheap foreign goods, but because of the lack of availability of efficient infrastructures and complete negligence of provision of business incentives by the government. These are driving local manufacturers out of business. While this is going on, the government keeps raising the list of banned goods with a false hope for magic to happen, there by starving Nigerians of these products, and making them to rely on goods that are smuggled into the country. This trend has made the smuggling of banned goods a lucrative business, and has starved Nigeria of the tax funds that can be gotten from a legal importation of these goods.
This is as simple as 123.
If many goods must be banned from importation, domestic production must be stimulated to cater for the supply gap that will be created. To achieve this, government needs to provide basic infrastructures to encourage Nigerians to manufacture more. If the infrastructures are efficient, local production can pick, then Nigerians can match their foreign counterparts.
At the moment, this is not happening. The government needs to unban many goods, and ensure more national income through import tax. While they can use the improvement in national income to boost infrastructural availability, aid local production, then enhance the competitiveness of local producers through protective policies to encourage foreign direct investment, which will boost employment and national income further.
It is simple, but the government no get brain atall.[/b]

I understand all what you have painted ,but those are text book theories,in reality you need to do it in a different way,how ever if things were right the customs will never be this corrupt,i am a business person and i have experienced a lot in the hands of this people.All institutions of nation building have broken down in Nigeria,so if the anti corruption fighters were doing things right all this things will not happen.

You know apart from infrastrustral developement ,most youths now have ideas of short ways to riches,people are now thinking of going into politics and not manufacturing because business is not attractive again.

How come in Ghana is working out fine and not working in Nigeria

olas2u:

I understand all what you have painted ,but those are text book theories,in reality you need to do it in a different way,how ever if things were right the customs will never be this corrupt,i am a business person and i have experienced a lot in the hands of this people.All institutions of nation building have broken down in Nigeria,so if the anti corruption fighters were doing things right all this things will not happen.

You know apart from infrastrustral developement ,most youths now have ideas of short ways to riches,people are now thinking of going into politics and not manufacturing because business is not attractive again.

How come in Ghana is working out fine and not working in Nigeria

[b]

How can you think that those are text book theories when it is the reality on ground. The strengthening, professionalization and modernization of the Nigerian customs institution is part of Security provision which is a basic infrastructure that is needed in Nigeria. My point is how won't a custom officer be tempted when he/she is being poorly paid, yet sees ways to make millions by just allowing contraband goods to go in? The government is not paying them well, yet they created a situation that will make the customs officers to fall for the opportunity to make more money by indulging in illegalities. Government complains that they don't make enough income, that is why they pay national workers little wages, and fail to provide infrastructures. Yet they ignore means of making extra income, and instead support corruption by pretending not to see the visible supply gap that is in Nigeria, so that bribes can be collected by these customs officers for contraband goods to fill in the gap left by lack of adequate local production.

You need to understand that to sell, you must buy or make. When you buy or make, you suffer some loss, and aim at recovering with profits made from the sales of the purchased or made goods. This is not theory, it is reality. Government must ensure that Nigeria makes or buy goods to satisfy the huge consumption thirst of Nigerians through providing loans, incentives and right policies. After doing this, the government must ensure that in the long run their efforts can yield employment, more national income and a good business environment.
I am also a businessman. I know that the most industrialized countries still allow the import of many goods that Nigeria has banned. Yet they make alot of income from import tax and FDI through the means you called a theory.
About the youth part you talked about, I will use the Nigerian music industry as an example. Do you see the number of Nigerian youths that go into music production and act nowadays? Why would they do so if they are seeking for quick money? When you see how much they invest in music just because it is a new money making trend in the country, you will understand how much interest a simple entrepreneurial facilitation program by the government will generate among the Nigerian youths.

Who told you that Ghana is working out fine?  [/b]

The ghanians also have a lot of banned items with high import tarriffs and incentivesto the medical personals to encourage them to live in ghana,they have a corrupt customs as well,but they are a serious country that will do better with more resources.I agree with you,we need to  talk more of realistic approaches that will work out fine.Those cutoms officers discourage exports with their corruption ,to export out of Nigeria,they ask for so much ,forgeting the benefit of exports to the nation.I think the banned items by obj administration was well thought out if they had continued to do things right.If you dont start ,you will never produce,we eat dollars wear dollars ,this affect  us ones the exchange rate goes up.So much money is going out of Nigeria already,we dont have a national airline,so all the money is made by foriegn airlines who take the money back,no shipping line to carry our crude oil,our participation in the maritime industry is 0,and all the monies dont stay in Nigeria,etc.

we need to create wealth for better living through ideas.

I agree with this write up in its entirity.

You can not ban imports when there is no alternative. Banning alone as a means of boosting manufacturing is a very lazy policy. If Government wants to encourage local manufacturing they need to do a little more than merely banning imports. You have to go further by starting Business Incubation activities, providing facilities like Energy to reduce cost for small businesses, encouraging business men to go into local manufacturing by different means.

The fundamental benefit of encouraging local manufacturing over import is to create more job opportunities for your people.

People forget that when Government ban importation of these goods most times they put people out of business and then only a few die hard ones will now go into importation of illegal products. Then you have manufacturers still not able to manufacture the product at a price possible to retail in the market due to high cost of business in Nigeria. At the end of the day we will have net loss of jobs because those who were involed in legitimate Merchandise were also employed from what they do.

The Merchant and the Manufacturer are both Nigerians who deserve respect and fair treatment from the Government. In a country where Government has failed to live up to its responsibilities, a lot of people take to merchandise to earn a living. Draconian policies that purnish merchants for being merchants is not only bone headed but self defeating.

mikeansy:

I agree with this write up in its entirity.

You can not ban imports when there is no alternative. Banning alone as a means of boosting manufacturing is a very lazy policy. If Government wants to encourage local manufacturing they need to do a little more than merely banning imports. You have to go further by starting Business Incubation activities, providing facilities like Energy to reduce cost for small businesses, encouraging business men to go into local manufacturing by different means.

The fundamental benefit of encouraging local manufacturing over import is to create more job opportunities for your people.

People forget that when Government ban importation of these goods most times they put people out of business and then only a few die hard ones will now go into importation of illegal products. Then you have manufacturers still not able to manufacture the product at a price possible to retail in the market due to high cost of business in Nigeria. At the end of the day we will have net loss of jobs because those who were involed in legitimate Merchandise were also employed from what they do.

The Merchant and the Manufacturer are both Nigerians who deserve respect and fair treatment from the Government. In a country where Government has failed to live up to its responsibilities, a lot of people take to merchandise to earn a living. Draconian policies that purnish merchants for being merchants is not only bone headed but self defeating.

Exactly!!!! On point. You hit the nail on it's head.

olas2u:

The ghanians also have a lot of banned items with high import tarriffs and incentivesto the medical personals to encourage them to live in ghana,they have a corrupt customs as well,but they are a serious country that will do better with more resources.I agree with you,we need to  talk more of realistic approaches that will work out fine.Those cutoms officers discourage exports with their corruption ,to export out of Nigeria,they ask for so much ,forgeting the benefit of exports to the nation.I think the banned items by obj administration was well thought out if they had continued to do things right.If you dont start ,you will never produce,we eat dollars wear dollars ,this affect  us ones the exchange rate goes up.So much money is going out of Nigeria already,we dont have a national airline,so all the money is made by foriegn airlines who take the money back,no shipping line to carry our crude oil,our participation in the maritime industry is 0,and all the monies dont stay in Nigeria,etc.

we need to create wealth for better living through ideas.

[b]
You made a valid point.
These require a serious and pro-developmental government. I tried to manufacture electronics in Nigeria, but was terribly frustrated.I had to go to a more efficient society to manufacture them. The products are imported into Nigeria without any competition from local manufacturers. I would have been doing it in Nigeria if my company's survival was assured. However, while I import, I have warehouses and offices around Nigeria, where many Nigerians are employed. That is my point. Importation also generates employment.
Manufacturing takes much more than mere patriotism. It requires capital and consistent profit to be sustained. That is not possible in Nigeria because the cost of production is very high, and the supposed protection and advantage that local manufacturers should have are completely non-existent, because the government simply does not want to put the right things in place for Nigerian manufacturers to survive. The fact that the banned products still find their way into Nigeria is more dis-stabilizing to local producers, because despite the fact that the contraband products becomes more expensive after importation due to bribery of Nigerian customs, they still remain cheaper than the locally produced ones.
The import merchant can still be allowed to import some of the banned products legally, so that the products can fill up the supply gap, they can be properly monitored, import taxes can be accrued , The long term gain of providing basic infrastructures through increase in revenue can be attained and employment can be generated in that sector. An international diplomatic angle can also be added to it if the government can make many nations to be dependent on Nigeria's domestic consumption for sales of goods and production.
This our government tire me o.  [/b]