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# Assess policies the Nigerian government could use in response to the concerns of the country’s ‘manufacturers and trade unions’ if they join this trading bloc
- URL: https://www.a-level-economics-tutor.com/assess-policies-the-nigerian-government-could-use-in-response-to-the-concerns-of-the-countrys-manufacturers-and-trade-unions-if-they-join-this-trading-bloc/
- Published: 2026-07-28T12:46:05.000Z
- Updated: 2026-07-28T12:46:05.000Z
- Author: Jaisul Naik
- Tags: Edexcel 10 mark question

### [Edexcel A-Level Economics Paper 2 June 2020 Extract](https://storage.ghost.io/c/ed/77/ed776ea5-c32f-46bf-aa49-8f19b6cd7ac4/content/files/2025/10/INSERT---June-2020-Paper-2.pdf?ref=tootingtutors.co.uk)

**Nigeria is considering joining the African Continental Free Trade Agreement.** 

**Assess policies the Nigerian government could use in response to the concerns of the country’s ‘manufacturers and trade unions’ (Extract B paragraph 3) if they join this trading bloc. (10 marks)**

Firstly, the Nigerian government could use a market-based supply-side policy such as lower corporation taxes. Lower corporation taxes enable firms in Nigeria to retain more of their profits. This allows them to reinvest more into machinery. This allows them to increase their productivity, which makes them more internationally competitive, allowing them to continue to export. And keep dependence on imports low despite the concerns about being 'more open to imports from other African countries'.

Secondly, the Nigerian government could use an interventionist supply-side policy such as greater investment in infrastructure. As they spend more on infrastructure projects, firms in Nigeria are able to access better transport networks. This can allow firms to increase their labour productivity as output per worker per hour increases for businesses where travel is a big part of the job. This might involve small businesses who often have meetings or have to transport goods. This can combat the concerns mentioned in Extract C about Nigeria having to compete with 'other African countries with lower labour costs'.

However, these supply-side policies have both an opportunity cost and a time lag. Spending more on infrastructure, or reducing taxes, would both lead to a worsening of the budget deficit if the government do not make a decision to cut other forms of spending or raise other taxes. This can lead to other issues like implications on inequality or living standards. Additionally, the idea to spend on infrastructure is likely to have a particularly large time lag due to the time taken to actually complete such projects.

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