Assessing the Impact of Trade Policies on Growth and Development of the Manufacturing and Agricultural Sectors in Nigeria

Abstract

This article examines the impact of trade policies in Nigeria (1960–2022) on the manufacturing and agricultural sectors. To set the context, I have grouped the trade policy periods into two categories: (a) the pre–structural adjustment programme (SAP) era (1960–1985) and (b) the post-SAP era (1986–2022). I have then examined economic data and all the existing literature to understand the pattern of manufacturing and agricultural outputs during these policy periods. Pre-SAP and post-SAP trade policies show a shift from protectionism to liberalisation, moderately improving agricultural and industrial sectors but still facing obstacles. Despite policies and agreements to improve trade, economic development remains unrealised. This study demonstrated that trade policies have led to erratic progress in both the agricultural and manufacturing sectors, consequently making a lesser contribution to the overall Nigerian development. Within this debate, three different schools of thought can be distinguished. The first school of thought holds that trade policy reforms benefit the growth of Nigerian manufacturing and agricultural sectors. The second school of thought contends that trade policy reforms (such as trade liberalisation) have a detrimental effect on industrial and agricultural sectors. The third school of thought argues that there is no proof or substantial linkage between trade policy reforms and the productivity and growth of manufacturing and agricultural sectors. Nevertheless, to benefit from trade liberalisation, this article identifies the need to revise the Nigerian trade policy as well as stabilise foreign exchange rates to advance and boost local manufacturing and agricultural sectors and promote active participation in trade agreements and policies.