Nigeria not yet integrated into global economy

The Nigerian economy is still not fully integrated into the global economy says a half year 2010 report on the economy performance of the Central Bank of Nigeria released last week.

“The low performance of these indicators indicates that the Nigerian economy is not fully integrated into the global economy and, therefore, cannot adequately tap the potentials of global trade,” the report stated. Some of these indicators are the ratios of total trade; trade balance; imports; exports; total foreign exchange (forex) flows and total net forex flows as percentages of gross domestic product (GDP).

The total value of all global trade imports and exports was about $25 trillion dollars as at 2007, with China contributing about $2.3 trillion and India contributing about $250 billion. Nigeria’s trade balance stood at about $9.9 billion as at the first half of 2010. The country’s major contribution to world commerce is crude oil, being the sixth largest exporter in the world.

The report pointed out the decline in estimated foreign direct investment (FDI) and portfolio investment (PI) inflows in the first half of the year compared with their corresponding levels in the first quarter of the year and second half of 2009. This decline was traced to the slow recovery of the country’s trading partners from the global financial and economic crises and the recent Greece sovereign debt crisis.

“Most importantly, the absence of “investment - pull factors” in the country have continued to undermine the attraction of global capital into the country,” the CBN stated.

Samuel Kolawole, managing director of University Press, a publishing outfit, said the inability of Nigerian products to feature on the international arena was worrisome. Mr Kolawole said that despite the vast agricultural and solid minerals export potentials, Nigeria was still lagging behind in the international trade. “Currently, international trade in Nigeria is one way. We mainly import without much to export. Nigeria’s problem is mainly lack of knowledge in knowing what the acceptable quality is and packaging of local products.”

Government should do more

He said government need to do more to encourage Nigerian businesses to trade on the global arena. “For instance, our farmers need to be taught what they need to do to produce in order to be able to export more. In terms of quality and packaging, a lot still needs to be done to make Nigerian products acceptable internationally.

In the publishing business, he said many Nigerian publishers now sell their publications in other countries due to improvement in quality and packaging.

“People have stepped up their game. A lot of Nigerian publishers have opened in Ghana and other African countries. We need to change our psychology that we cant participate in international trade,” he said.

According to the CBN report, Nigeria recorded foreign exchange net-flow of $6.33 billion in the first half of the year compared to $13.6 billion in the first quarter.

Source:http://234next.com/