Assessing the Economic Impacts of an Economic Partnership Agreement on Nigeria

38 Pages Posted: 20 Apr 2016

See all articles by Soamiely Andriamananjara

Soamiely Andriamananjara

World Bank - World Bank Institute (WBI)

Paul Brenton

World Bank

Jan Erik von Uexkull

affiliation not provided to SSRN

Peter Walkenhorst

American University of Paris (AUP)

Date Written: April 1, 2009

Abstract

This study discusses potential economic implications for Nigeria of an Economic Partnership Agreement with the European Union. It uses the World Bank’s Tariff Reform Impact Simulation Tool to assess the effects of preferential tariff liberalization with respect to the European Union. The results suggest that the impact of an Economic Partnership Agreement on total imports into Nigeria will be slight. This is in part because the Agreement will likely allow the most protected sectors to be excluded from liberalization, and also because where substantial tariffs are involved much of the increase in imports from the European Union will occur at the expense of other suppliers of imports. It is this trade diversion, arising from the discriminatory nature of the EPA, which generates a negative welfare impact of the tariff reforms. One way for Nigeria to limit these losses is to pursue non-preferential trade liberalization before implementing an EPA. The paper looks at the large number of import bans in Nigeria and argues that the positive impact on welfare of removing these import bans is likely to be substantial. Their removal would undermine a major reason for cross border smuggling and pave the way for a return to normal regional trade flows. The paper shows how an Economic Partnership Agreement presents an opportunity for accelerating the reforms that are needed to support a strategy to increase regional and global trade integration. Such an agreement is more likely to have positive and significant impacts when integrated into a comprehensive strategy toward competitiveness and alleviation of the supply constraints that have stifled the impact of previous trade agreements. Key issues that should be addressed include liberalization and regulatory strengthening of services sectors to ensure that all firms in Nigeria have access to efficiently produced backbone services and initiatives to address the country’s poor trade logistics performance.

Keywords: Free Trade, Trade Policy, Currencies and Exchange Rates, Debt Markets, Trade Law

Suggested Citation

Andriamananjara, Soamiely and Brenton, Paul and von Uexkull, Jan Erik and Walkenhorst, Peter, Assessing the Economic Impacts of an Economic Partnership Agreement on Nigeria (April 1, 2009). World Bank Policy Research Working Paper No. 4920, Available at SSRN: https://ssrn.com/abstract=1401225

Soamiely Andriamananjara (Contact Author)

World Bank - World Bank Institute (WBI) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202 458 0284 (Phone)

Paul Brenton

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Jan Erik Von Uexkull

affiliation not provided to SSRN

No Address Available

Peter Walkenhorst

American University of Paris (AUP) ( email )

31 Avenue Bosquet
Paris, 75007
France

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