Trade liberalization should improve Nigeria’s macroeconomic performance
We have conducted this third Trade Policy Review of Nigeria in a frank
and constructive manner. We have benefited from the contribution of
the Nigerian delegation, led by Mrs. Ogunleye, Permanent Secretary of
Federal Ministry of Commerce, the very insightful comments by our
discussant, Dr. Alexander Gross, and the detailed questions and
thoughts of several Members.
Members appreciated Nigeria's active participation in the multilateral
trading system, including the ongoing negotiations. They stressed its
important role in regional integration in Africa, mainly through its
membership of the Economic Community of West African States (ECOWAS).
Members also commended Nigeria on its efforts towards full democracy
and on steps taken to reduce corruption, but stressed the need for a
further improvement of its business environment.
Nigeria's macroeconomic and structural reform efforts, including
through the National Economic Empowerment and Development Strategy
(NEEDS), were acknowledged, and the contribution of developments in
the international oil market to its recent economic performance was
emphasized. Nonetheless, trade barriers and increased foreign assets
from oil exports have maintained inflation at a high level, while
trade protection and the exchange rate regime have fuelled informal
Members expressed concerns about the increase in the level of
protection of Nigeria's economy since its last TPR in 1998: MFN
tariffs have been raised on many products, the number of import bans
has been increased tenfold, and, in addition, various other duties and
charges apply to imports. These measures, together with various duty
and tax concession schemes – sometimes subject to local-content
requirements –, make Nigeria's trade regime complex, while the binding
of import duties at ceiling rates further challenges its
predictability. State ownership remains high and preshipment
inspection is required on imports. Members urged Nigeria to liberalize
its trade regime and to implement the WTO Customs Valuation Agreement.
The implementation of the liberalization programme adopted by ECOWAS
Members welcomed Nigeria's reform efforts in the services and energy
sectors, and sought clarification about the pursuit of the reforms.
Members also asked questions on other issues, notably: trade policy
formulation and implementation; quantitative restrictions and the
licensing system; contingency trade remedies; standards and other
technical requirements; public procurement; intellectual property
rights; and specific measures related to agriculture.
Members appreciated the responses provided by the Nigerian delegation,
and looked forward to further written replies.
In conclusion, it is my understanding that Members have encouraged
Nigeria to pursue its macroeconomic reforms, with an emphasis on trade
liberalization through simplification and reduction of import duties,
elimination of import bans, and adoption of trade facilitation
measures and WTO-consistent rules and regulations. Such reforms,
together with the dismantling of supply side constraints and
improvements in Nigeria's multilateral commitments in goods and
services, should promote both a better allocation of resources in line
with Nigeria's enormous comparative advantages, and the
diversification of the economy away from petroleum products. These
should contribute to mainstreaming trade into Nigeria's development
strategy and to the effectiveness of its poverty reduction strategy.
Nigeria's trading partners could help by providing market access