2015年-世界发展银行全球_Benefits_of_the_ECOWAS_CET_and_EPA_Will_Outweigh_Costs_in_Nigeria_but_Competitiveness_is_the_Real_Issue_11页_288kb

Africa Trade Policy Notes Summary

Core Content

The document provides an analysis of the potential impacts of the ECOWAS Common External Tariff (CET) and the Economic Partnership Agreement (EPA) with the European Union (EU) on Nigeria's economy, particularly focusing on public revenue, consumer welfare, and firm profitability. It highlights that while the CET and EPA have been significant milestones in regional trade policy, their implementation has not yet secured broad consensus, especially in Nigeria.

Main Viewpoints

• Trade Policy Reforms and Competitiveness: The CET and EPA are seen as important steps towards regional integration and global trade participation, but their effectiveness is contingent on addressing deeper supply-side constraints in Nigerian industries.
• Nigeria's Inward-Looking Policy: Nigeria has historically favored protectionist measures, such as high tariffs, import bans, and special levies, which have limited efficiency and had damaging side effects.
• Evidence-Based Debate: The World Bank conducted two studies to assess the likely impacts of the CET and EPA, aiming to provide a more objective basis for policy discussions by using a transparent and simplified methodology.

Key Findings

Impact of CET Implementation

• Tariff Level and Trade Flows:

  • Scenario A (CET with bans and levies): Slight increase in import restrictions, leading to a marginal reduction in imports.
  • Scenario B (CET without import bans): Import growth of 1.4–2.8%.
  • Scenario C (Full CET): Import growth of 2.7–5.3%, with significant tariff reductions on certain products.

• Public Revenue:

  • Revenue increases in scenarios A and B due to substitution of bans with tariffs.
  • Revenue decreases in scenario C, but the overall fiscal impact is minimal (around 0.5% of total fiscal revenue).

• Consumer Welfare:

  • Under scenario A, prices for the average consumption bundle rise by up to 0.7%.
  • Under scenario C, prices fall by 2.3–2.7%, benefiting consumers, especially the poor, through lower prices on food items like rice.

• Firm Profitability:

  • Full CET implementation leads to a marginal increase in profitability for the median firm (+0.1%).
  • Lower input prices from removing import bans and levies have a positive and durable effect on productivity and competitiveness.
  • Around 60–75% of firms are expected to benefit from the reform, while 40% may see a reduction in profitability, though most would remain profitable.

• Jobs:

  • Only 28% of current jobs are affected by the negative impacts of CET implementation.
  • Sectors like textiles and apparel may face more significant employment challenges, suggesting the need for adjustment assistance.

Impact of EPA Implementation

• Tariff Level and Trade Flows:

  • The weighted average tariff rate decreases slightly from 11.3% to 9.1%.
  • Moderate import response is expected, with some trade diversion towards Europe.

• Public Revenue:

  • Revenue loss due to the EPA is estimated at 17.3–18.7% of total tariff revenue, but only 0.8% of total fiscal revenue.

• Consumer Welfare:

  • A modest decrease in the price of the average consumption bundle (around 0.3%).
  • The main drivers are lower prices for vegetables, dairy, fish, and seafood.

• Firm Profitability:

  • The median firm's profitability is expected to increase by 0.6%.
  • Around 63% of firms are expected to benefit, while 31% could see a decrease in profit.
  • Most firms experiencing losses would still remain profitable.

• Jobs:

  • 58% of jobs are expected to benefit from the EPA, while 29% could see a decline in profitability.
  • Only 0.3% of jobs would be at risk of becoming unprofitable.

Policy Recommendations

• Public Revenue:

  • Improve duty collection through better control of exemptions, corruption, and smuggling.
  • Consider reforms to the domestic tax system to compensate for any shortfalls in international trade taxes.

• Consumer Welfare:

  • Promote public awareness and competition in distribution to ensure price reductions are passed on to consumers.

• Firm Profitability and Jobs:

  • Support a competitiveness agenda that addresses supply-side constraints such as power outages and high transport costs.
  • Provide adjustment assistance to sectors likely to be negatively impacted, such as textiles and apparel.

• Trade Facilitation:

  • Simplify trade procedures and improve customs cooperation to reduce smuggling and increase formal trade.
  • Explore the possibility of a more advanced customs union structure to enhance intraregional trade.

• Regional Integration:

  • The CET and EPA are expected to increase Nigeria's preferential margin in regional markets, especially for food products and beverages.
  • Strengthen regional trade mechanisms to promote better integration and support for local producers.

Conclusion

• The benefits of the CET and EPA are expected to outweigh their costs in Nigeria.
• However, the real challenge lies in improving domestic competitiveness, which could have a more substantial impact on firm productivity and growth than the trade reforms themselves.
• A broad, competitiveness-driven strategy is recommended over sector-specific protectionism to maximize the benefits of the reforms and support sustainable development.