The performance of agricultural trade liberalization on tax revenue in Nigeria
between 1975 to 2009 was analysed. Specifically, the study sought to:
determine the effect of trade openness on economic performance of the
Nigerian economy between; examine the contributions of the agricultural
sector to Nigeria’s Gross Domestic Product between; and analyze the
influence of selected factors on Nigeria’s agricultural trade tax revenue. Data
for the study were collected using secondary source, and the data collected
analysed using inferential statistics. The result of the analysis shows a
significant positive relationship (9723.9) between Nigeria GDP and trade
openness, measured as the ratio of the sum of non-oil imports and exports in
relation to GDP. Again, it was observed that the contributions of the
agricultural sector in real terms to Nigeria’s GDP between 1975 to 2009
ranged from 20.13% to 43.88% in which case, the crop sub-sector dominated
in its contribution to GDP while the livestock, fishery, and forestry sub-sectors
followed respectively in the contribution to the GDP. Meanwhile, the
elasticity of the trade factors on Nigeria’s trade tax revenue was inelastic
though not statistically significant; and no quantitative effect on agricultural
tax revenue. Hence, trade liberalization has not played a notable role with
respect to revenue generation in Nigeria. The study therefore concludes that
agricultural import trade has been more responsive to the tax revenue than
agricultural export trade in Nigeria. It therefore recommend that the existing
non-tariff barriers in the agricultural sector trade should be replaced with
tariffs as this would enhance trade tax revenue generation in Nigeria; and
putting in place effective agricultural policies that can attract more investment
into the sector both locally and internationally.