June 12, 2013
Trade Liberalization Economic Growth and Poverty Reduction in Nigeria
Do you believe trade liberalization have an impact on poverty? This paper examines the causal relationships between trade liberalization growth of the Nigerian economy and poverty. Trade liberalization is The removal of or reduction in the trade practices that thwart free flow of goods and services from one nation to another. It includes dismantling of tariff (such as duties, surcharges, and export subsidies) as well as nontariff barriers (such as licensing regulations, quotas, and arbitrary standards). According to the article, “Trade Liberalization Economic Growth and Poverty Reduction in Nigeria,” it states, “Evidence from the study suggest that trade liberalization does not cause poverty reduction, implying that the benefit of trade liberalization does not trickle down to the poor in Nigeria. This suggests that countries with high propensity to import and poor commodity prices need not to strictly follow the one size fit all trade liberalization policies rather each country need to focus on trade policies peculiar to its own environment, which can deliver growth and translate growth into a meaningful poverty reduction.” Basically, this is saying focus on importing the high demand and beneficial things to the country opposed to focusing on the things the country does not have and does not need.
From 1986 Nigeria made changes to their rules and regulations of the trade liberalization. By them making those changes it caused tariff system to be unbalanced. According to the article, “Trade Liberalization Economic Growth and Poverty Reduction in Nigeria,” it states,This led to raised in the classification of tariff from 1,560 of the 1980 regime to 4,960 in addition, the decline in wide spreads of the tariff burden which was delivered in the trade-weighted and average nominal tariff from 33% to 23%, however, certain agricultural and industrial imports products, which compete with major domestic producers, remained subject to high nominal rates up to 60% and some luxury goods such