Please join us on January 23rd in Abuja for the first installment of IFPRI Nigeria's Monthly Seminar Series in 2014. This month we are honored to have IFPRI Senior Research Fellow/NSSP Program Leader, Dr. Kwabena Gyimah-Brempong, presenting. In the seminar, titled "Welfare Implications of Current Food Trade Policy in Nigeria," Dr. Gyimah-Brempong will discuss the results from IFPRI's current study on the implications of select trade policies on the welfare of Nigerians and whether these policies will accomplish the goals they were designed to achieve. For details and the full abstract, please see below.
Date: Thursday, January 23, 2014
Time: 2:00PM - 3:30PM
Venue: IFDC/IFPRI Conference Room No 6/Plot 1413 Ogbagi Street Off Oro-Ago Crescent Cadastral Zone II, Garki, Abuja Nigeria (Near old CBN building and behind Union Homes)
RSVP: Email email@example.com before the 22nd of January.
We apologize, but we are unable to provide transportation stipends to attend this event.
The Agricultural Transformation Agenda (ATA) currently being implemented by the Federal Government of Nigeria (GoN) is a part of a recent push by the GoN to revive the Nigerian economy by way of its key sectors. Among other objectives, the ATA aims to achieve food self-sufficiency in a short period of time. The GoN, through the Federal Ministry of Agriculture and Rural Development (FMARD), is implementing several policies including investments in seed, fertilizer, irrigation, and trade policies to achieve these objectives. To encourage domestic production of rice, wheat, and sugar, the GoN has increased import tariffs on these products to 110%, 100%, and 80% respectively beginning on January 1, 2013. In addition, the GoN requires 20% substitution of cassava flour for wheat flour in the production of bread.
As part of the World Banks (WB) Agricultural Sector Development Policy Operation (AgDPO), IFPRI-Nigeria has been asked to study the welfare impact of current food trade policies. Specifically, the request was to study the welfare effect of current rice, wheat, and sugar trade policies as well as the policy of 20% substitution of cassava flour for wheat flour in bread making. The study focuses on whether (i) these policies succeed in reducing imports of these commodities and if so what impact they have on the domestic prices of these imports; (ii) How these trade policies affect consumer demand of these imports; (iii) how these policies succeed in inducing the supply responses of domestic producers of these products; and (iv) the overall welfare effects of these policies on the average Nigerian.
Our results show that demand for rice, wheat, cassava and sugar will continue to rise based on Nigerian demographic and income trends. These commodities face inelastic demand and are for the most part unaffected by changes in prices. The policy to increase tariffs associated with these commodities is aimed at curbing imports, raising revenue and encouraging domestic production. However, the tariffs are not doing much to curb imports as smuggling channels are numerous and difficult to plug. Also, tariff revenue has dramatically dropped as a result of smuggling. Local production is unlikely to increase to meet rising demand in the short to medium term due to numerous factors not least among them are an unfavorable agro-climatic environment, lack of access to appropriate technologies, and the inability of (mostly) small holder farmers to respond appropriately to any price incentives. The welfare impact of these trade policies is an increase in prices and a reduction in consumption that disproportionately affects households in the lowest income quintiles. The conclusion here is that restrictive food trade policy in Nigeria has negative welfare effects on the average Nigerian and the Nigerian economy.
Kwabena Gyimah-Brempong is the Program Leader of IFPRI-NSSP and holds a PhD in Economics from Wayne State University in Detroit, Michigan. He has been a Professor of Economics at the University of South Florida in Tampa since August 1994, chairing the Department from August 2004 to August 2012. He was an Associate Professor and Professor of Economics at Wright State University in Dayton, Ohio from 1988 to 1994 and an Assistant Professor at New College of the University of South Florida. From 2002 to 2004, he served as Economics Program Director at the National Science Foundation (USA).
Kwabena’s research focuses on issues of African economic development, economic analyses of crime and crime control, and efficiency in the provision of public services. Kwabena has published over 60 refereed articles in professional economic journals including the American Economic Review, Journal of Business and Economic Statistics, and the Review of Economics and Statistics. He has also published 10 book chapters. He serves on the editorial boards of 3 journals, reviews for a large number of journals, and consults for several international organizations. Kwabena is a past President of both the National Economic Association and African Finance and Economics Association.