Nigeria's Trade Complementarity and Similarity with West African Sub-Region

Abstract

This study analyzed Nigeria’s trade complementarity and similarity with West African sub-region using trade intensity index and revealed comparative advantage index for the period 2000-2014. Exports and imports of Nigeria and ECOWAS and their twenty major products categories were analyzed. The result of the study shows that Nigeria and ECOWAS trade is importance given their exports and imports relative importance in the world trade. Easy access to sub-regional markets have significantly contributed to a great extent toward their high trade intensity within the sub-region. Nigeria’s trade intensities with West African countries are high more especially with countries like Benin, Cote d’Ivoire, Ghana, Senegal and Togo. Evidence from the trade indices shows that Nigeria can export cocoa, mineral fuels, rubber and raw hides and skins to countries with low RCA in these products. Because of limited industrial base, Nigeria and ECOWAS have no comparative advantage in the production and exportation of products such as articles of iron and steel, nuclear reactors, electrical machinery and equipment and furniture and have to import these products from non ECOWAS member countries. This also goes with the notion that Nigeria and ECOWAS are primary producers with little or no benefits from world trade. As a result of this fact there is a need for the countries within the sub region to change their production structure in order to encourage more trade among them, through the development of sound policies that will lead to grow of small scale manufacturing industries.