of dollars for the sterling area. In 1954 and 1955, her trade surplus with the United States amounted to £10,341,000 and £6,651,000. Nigerian trade data are available only through the first half of 1956, but on the basis of United States statistics, Nigeria had an excess of exports over imports with the United States in 1956 of $29,562,000 (or about £10.5 million).

Cocoa and columbite were the principal items exported to the United States in 1955 and 1956. Goatskins, kidskins, and rubber were also important. Main imports are wheat flour and unmanufactured tobacco. Of Nigeria's total imports of wheat flour and unmanufactured tobacco in 1953, 83 percent and 77 percent, respectively, came from the United States. Various other items figure in the import trade with the United States-chiefly, industrial machinery, automotive parts, and other manufactured commodities.

Table 22 gives a breakdown of the principal items in Nigeria's United States trade.

Under the present Constitution, legislation dealing with external trade is exclusively reserved to the Federal Government. Consequently, a uniform schedule of import and export duties applies to the whole of Nigeria, including the Trusteeship Territory of the Cameroons.

Because of the Niger River Treaty between France and England and other international obligations, the Nigerian customs tariff has never provided for preferential treatment of British goods. The Nigerian customs import tariff is a revenue tariff, with a single set of rates equally applicable to goods of all nations. Similarly, export duties in Nigeria are levied at the same rates irrespective of the country of destination.

Customs and excise receipts were estimated at £41,854,000 in 1955-56 and constitute about three-fourths of all revenue collected by the Federal Government (see chapter XIV). The heaviest individual revenue producers are the import duty on cotton piece goods and the export duty on cocoa, each accounting for 11.7 percent of total revenue receipts. Other important revenue sources are the export duties on palm products, peanuts, rubber, and hides and skins while among import duties, unmanufactured tobacco, gasoline, spirits, salt, and cigarettes are other leading items.

The schedule of export duties levied on goods controlled by marketing boards varies between 10 and 20 percent ad valorem. For noncontrolled exports, duties are levied on a specific basis. In 1955, export duties collected represented 10.5 percent of the total value of exports from Nigeria.

The range in import duty rates is broad, generally averaging about 20 percent but varying from 10 percent ad valorem or less to as high as 75 percent ad valorem for certain goods. Many rates are leviable either on an ad valorem or specific basis, whichever is the higher. An extensive list of goods is permitted duty-free entry, including fuel, tools, electrical machinery, and machinery for industrial, agricultural, mining, and scientific purposes. A complete schedule of the free list appears in appendix K. The Federal Government has introduced legislation which establishes permanent machinery through which further relief from import duties or other protection can be accorded Nigerian industry in order to stimulate industrial development. A committee set up in November 1955 to study the problem submitted its report in 1956, recommending that a Federal ordinance be enacted empowering the Government to refund, either in whole or in part, duties levied on raw materials and/or capital goods imported by specific industries adjudged in need of such relief on the basis of review of applications from such industries. In addition, the report recommends establishment of an official committee to advise Government on tariff revisions and modifications in the interest of industrial development.

In respect of possible duty protection to import industries, the committee expressed the view that such protection should be granted "where necessary." The cost of protective duties to the general public and economy is acknowledged and the committee recommends that "apart from exceptional cases where strategic or other special considerations are involved, protective measures should not be continued indefinitely and should normally only be granted in cases where the local industry

for such licenses are screened by the Nigerian imports controlling authorities and approved only if the goods are considered essential and are unobtainable from the sterling area or softcurrency sources.

Most imports from the United Kingdom and soft-currency sources are permitted freely under open-general license except that specific licenses are required for the following goods irrespective of source of supply: Meat and fish, chilled or frozen, fresh butter, petroleum products, methylated spirits, explosives, arms and ammunition, movie films, live fish, and gold bullion. In addition, cement, jewelry containing gold, and road motor vehicles imported from outside the United Kingdom and British territories require a specific license. All imports from Japan are subject to individual license.

The granting of an import license assures the release of foreign exchange in payment of the goods, but such exchange can be granted only through banks authorized by the exchange control authorities to deal in foreign exchange.

Export controls.—A number of the leading export commodities are marketed abroad exclusively through the marketing board system, and private trade in such goods is not possible. For noncontrolled goods, exporters in Nigeria are required to obtain a specific license authorizing shipment to the United States and other countries, except those in the sterling area, Scandinavia, and neighboring French territories in Africa. Such licenses are usually granted as a formality since the purpose of the licensing control is not to channel exports to particular countries but to insure that the proceeds of the sale are repatriated to Nigeria in accordance with exchange control arrangements. The general policy of the Government has been to encourage exports to the United States so as to maximize dollar earnings, but the export control system is not used as a means to this end.

4

Foreign exchange controls.-The legislation in force in Nigeria is similar to that in effect in the United Kingdom and other sterling area countries. All remittances to nonsterling countries require approval of the Nigerian exchange control authorities. The policy of the Government has been to permit freely such remittances as represent interest, dividends, and profits on approved original dollar investments. Likewise, no restriction is imposed in the repatriation of such investments.

With regard to payment for nonsterling imports, such remittances also require prior approval of the exchange control authorities, but in practice such approval is delegated to the authorized dealers in foreign exchange-the Bank of British West Africa, Ltd., Barclay's

Bank (D. C. & O.), the British and French Bank for Commerce and Industry, Ltd., and the National Bank of Nigeria, Ltd.

Under the exchange control laws, all proceeds of foreign exchange transactions must be converted into local currency through the authorized dealers.

NIGERIA'S ROLE IN STERLING AREA

As a member of the sterling area, Nigeria shares in the freedom of movement of capital and goods permitted between sterling area countries in terms of the British exchange control system. On the other hand, as a member, Nigeria has agreed to pool its dollar and gold resources with those of the sterling area as a whole and it is expected to follow policies which strengthen the sterling area's central gold and dollar reserves. As already indicated, Nigeria is a net contributor to these reserves.

No controls exist on remittances to residents of the sterling area, but all transfers of payments to nonresidents of the sterling area are subject to authorization by Nigeria's exchange control authorities. However, as regards remittances of earnings on dollar capital investments, as already pointed out, the policy of the Government is to permit such transactions without restriction on bona fide earnings, so that the exchange permit is a formality in such instances.

Nigeria's membership in the sterling area facilitates the maintenance of close trade and financial ties with the United Kingdom. Nigeria will no doubt continue its membership in the sterling area even after such time as it achieves full self-government. This relationship need not be negatively regarded by prospective investors, and, indeed, for certain investment enterprises aiming at possible exportation to adjacent British Commonwealth areas in Africa or elsewhere, Nigeria's sterling area affiliation may hold positive advantages. Certain investments may find current dollar import controls burdensome particularly if continuing access to regular supplies from the United States for component or raw materials is necessary. But the Government's general position of encouraging investment is such that essential needs should be met without difficulty.

Moreover, at such time as full self-government is achieved, should trade restrictions still be maintained in the sterling area for balanceof-payment purposes, it can be expected that Nigeria-as a large net dollar earner-will press for expanded dollar allocations to meet import needs.

No specific exchange control office is maintained, as such, but various Government officials, such as the Financial Secretary at Lagos, would undoubtedly review prospective investments.