> Press release: 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 trade.
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 should help.
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 opportunities.