Anaylsis Of The Impact Of Tariffs On Economic Growth In Ngeria (1980-2010)

Anaylsis Of The Impact Of Tariffs On Economic Growth In Ngeria (1980-2010)

Chapter One

Preface

1.1 Background Of The Study.

Protection in form of tariff and free trade have long been argued in profitable proposition and profitable history. still, it is possible to say that the precise relationship between trade walls in form of tariff or free trade in the long run profitable growth remains a delicate theoretical issue that is being explored in a variety of ways.

Simithian and Ricardian conclusion corroborated by the Hercscher- ohlin theorem recommend free trade as the stylish marketable mates. This doctrine that is concentrated on enhancement in the position of income is grounded on static frame that may limit the interpretation of the long run effect.

Relationship between profitable growth and tariffs depends substantially on the characteristics of a country. Tariff can profit a country depending on whether it is developed or developing or developed( a developed one seems to lose) either big or small country and whether it has relative advantage in sector entering protection. Tariffs are assessed on imported goods and are used to relate to schedule of duties applicable to a list of goods as the goods imported or exported. These levies could be assessed either as a chance of volume of the commodity concerned( announcement valorem), or on the base of some physical features as weight, length, an specific graveness.( Johnson, 1971).

Tariffs rates vary according to the type of goods imported. Import tariffs will increase the cost of importers and increase the price of imported goods in the original requests, therefore lowering the volume of goods imported. Tariffs may be assessed on import, and in an frugality with floating exchange rates, import tariffs have analogous effect as import tariffs. still, since import are frequently perceived as „‟ hurting ‟‟ original diligence while import tariffs are perceived as helping original diligence, import tariffs are infrequently enforced( Meier, 2000)

Protectionists believe that child diligence must be defended in order to allow them growth to a point where they can fairly contend with the larger progressed diligence established in foreign countries. They believe that without tariffs, child diligence will die before they reach a size of husbandry of scale, artificial structure, and skill in manufacturing have progressed sufficiently to allow the assiduity to contend in the global request. They argue that government have a responsibility to cover their pots through tariffs as well as their when putting its companies at a competitive disadvantage by making laws for social goods. They believe that these law end up destroying domestic companies and eventually hurting the citizens, but these laws were designed to cover.

Tariffs is always seen as a requital to social and profitable costs of trade or as a way of enhancing profitable advantages. still, in utmost cases economists, argue that erecting walls on trade put costs in the frugality that exceeds the benefit gotten. These costs can rise from inadequate resource allocation, intractable perpetration and foreignretaliation.The precise relationship between tariffs and profitable growth has long remained a delicate theoretical issue that is being explored in variety of ways. The question frequently asked by transnational and development economists, as well as their sympathizers is that which one lead to a briskly profitable growth, is free trade or defended trade?, economists are still in hunt for the respectable answer to this question.

Statement Of The Problem

Tariffs can be used to cover child diligence and this tariff has its problem it creates. High tariff and other forms of trade walls have been regarded as impediments to profitable growth. The use of tariffs to cover and to stimulate the product of the import negotiation in Nigeria has egregious problem. By protectingthese diligence, inefficiency may be encouraged.

High tariffs and other forms have burdened consumers with high price and have shielded directors from transnational competition. still a safe guard against frequent tariff changes and high tariff rates between 1995 to 2005. Nigeria ‟ s tariffs policy has faced great challenges of clumsy and lengthy significances procedures, frequent change in tariff. High duties on consumer goods widen the gap between applied and bound rate with their associated negative impact on the frugality.

The Nigeria government can make acceptable and dependable tariff programs, and also encourage this child diligence to produce those goods that tariff has been put on; the quality of this goods should match those formally imported. This study should be suitable to expose how the tariff assessed and the structure of this tariff, can make an impact on the profitable growth of Nigeria and how this can ameliorate the frugality as a whole.

Ideal Of The Study

The ideal of the study are as follows below;

1. To determine the nature of the relationship that live between tariffs and profitable growth in Nigeria.

2. To probe if tariff actually leads to profitable growth in Nigeria.

3. To examine the extent to which tariffs duty has bettered

Nigeria ‟ s frugality for the period 1980 to 2010.

4. To identify and assay the remedy for tariffs impediments inNigeria.

Statement Of Thesis

The working thesis for this study is as follow;

1. – Hi There is no significant relationship between tariffs and growth, therefore it has not caused any profitable growth in Nigeria.

2. – H0 Tariff has influence and impact on frugality growth ofNigeria to an

extent.

Applicability Of The Study

This study will be applicable to the Nigeria society in the following ways;

1. It’ll help us to understand the tariff structure of Nigeria

2. It’ll contribute to the literature review

3. It’ll give empirical substantiation on the nature of relationship that live between tariff and profitable growth in Nigeria; this will in turn companion policy makers in their programs expression.

4. probing into the tariff governance will enable us to know the positive benefactions it has made to ameliorate the import of locally produced goods.

5. It’ll help the government and policy makers to be suitable to formulate acceptable policy on trade.

6. It’ll help us to know, if tariff can lead to profitable growth or not Nigeria

Limitations Of Study

generally, tariff are in form of excise duties, import tariff and import tariff. shy complete dependable data, as data collected from some profitable journals and handbooks vary from each other. Time is another limitation encountered by the exploration.