WORLD TRADE
ORGANIZATIONWT/TPR/M/39/Add.1
12 November 1998
(98-4461)
Trade Policy Review
23-24 June 1998
TRADE POLICY REVIEW
NIGERIA
Minutes of Meeting
Addendum
Answers to Written Questions
The following communication was received on 23 June 1998 from the delegation of Nigeria
responding to advance written questions submitted by the delegations of the United States, Canada,
Australia and the European Union to the Trade Policy Review Body for the review of Nigeria.
_______________
REPLIES TO WRITTEN QUESTIONS
Question 1: INVESTMENT:
Would like to know content of the negative list on sectors allowed for Foreign Investment.
Answer: The Nigerian Investme nt Promotion Commi ssion Decree No. 16 of 1995 allows up
to 100% foreign ownership in all sectors of the economy.  Laws which are inconsistent with this
provision especially in the petroleum, minerals, energy and communications sectors are being
reviewed.  See paragraphs 9, 26-28 of the Nigerian Report.
Question 2: BILATERAL AGREEMENT
According to the Secretariat Report, Nigeria has bilateral trade agreement in force with a number of
countries but details are not available.  Would li ke to know more information on the agreements in
particular their nature, product coverage, and whether they entail any preferences.
Answer: Nigeria’s Bilateral Trade Agreements carry no preferential treatments.  The areas of
coverage include activities like trade facilitation, establishment of Joint Commissions to monitor
trading activities between the two countries as well as providing trade and investment information.WT/TPR/M/39/Add.1
Page 2
Question 3: ANTI-DUMPING
It is noted from the Secretariat Report that Nigeria has incorporated all the previous anti-dumping
duties on certain products into the custom duty on these products and have applied them on an - MFN
basis.  We would like to know the reasons behind such incorporation and in this connection whether
such duties are still regarded as anti-dumping duties or just import tariff for protection of domestic
industries.  If it is the former we would welcome further information as to how Nigeria discharges itsrelevant WTO obligations regarding investigations into dumping, injury and their causal relation.
Answer: Nigeria’s tariff structure was generally reviewed and harmonized in 1987.  There was
no expressed purpose to incorporate anti-dumping duties into the custom duty.  As a matter of fact,
the new customs and tariff rates which were introduced in 1995 covering the year 2001 reduce the
tariff range by 50%, from 0-300% to 0-150%.  As of now, Nigeria does not have the institutional and
regulatory capacity to investigate anti-dumping issues.  Plans are however, underway to institute an
Investigating Authority that will handle cases of dumping in the system.
Question 4: ANTI-DUMPING
We not that the custom (dumped and subsidised goods) Act 1958 permits the imposition of a special
duty on any goods that are deemed to be dumped in Nigeria or subsidised by any government or
authority outside Nigeria.  Nigeria has however, not notified any anti-dumping legislation to the
WTO.  Would Nigeria consider notifying the WTO of its legislation covering anti-dumping at whattime.
Answer: In addition to the answer to que stion 3, the Anti-Dumping legislation under
consideration will be notified to the WTO as soon as it is promulgated.
Question 5: IMPORT PROHIBITIONS
We note that Nigeria has removed certain items from its import prohibition list since 1991 while at the
same time added several other items to the list.  It is noted from the Secretariat Report that
prohibitions continue to distort trade patterns and stimulate smuggling activities, whilst depriving the
Government of tariff revenue in the light of the pr oblems revealed, has Nigeria considered reviewing
such prohibitions for protecting domestic industries.  Will Nigeria explore other options such as
tariffication?
Answer: Since the last review of 1991, the Impor t Prohibition List has been significantly
reduced.  Items such as rice, textiles, furniture, beer, stout and mineral waters, live or frozen poultry,
sparkling wines and champagne, hurricane lamps, fabrics and articles prefabricated buildings, have all
been removed from the Prohibition List.  The trend is therefore very progressive.
Question 6: GOVERNMENT PROCUREMENT
We note that all Federal Government Ministries and parastatals should buy locally produced goods,
where available at the right quality and quantity to meet local needs rather than importable substitutes.In this connection, we would like to know more details on the implementation of this policy.
Answer: Government has no expressed policy that local goods should be bought in preference
to imported ones.  In any case, given the current drive towards commercialisation and privatisation,
public sector procurement would become an increasingly reduced proportion of total expenditure.
Question 7: Moreover, we are interested to know whether Nigeria has any plan to increase
transparency in its government procurement procedures and access to its government procurement
sector for foreign suppliers.          WT/TPR/M/39/Add.1
                                 Page 3
Question 8: We understand that Nigeria is not a signatory tot he Plurilateral Agreement on
Government Procurement.  We are interested to know whether Nigeria has any plan to join this
Agreement.
Answer to Questions 7 and 8: Nigeria is steadily implementing its obligations under the WTO and
will endeavour to maintain consistency in its procurement policies and programmes in furtherance of
its commitment to trade liberalisation and openness.
Question 9: INTELLECTUAL PROPERTY
Nigeria being a developing country member, should implement the TRIPS Agreement by
1 January 2000.  Would like to know its plans for brin ging its current legislation into conformity with
the TRIPs Agreement in particular, in the areas of geographical indications, layout - designs of IC and
undisclosed information.
Answer: Nigeria is on the threshold of revising its domestic legislation on TRIPS with a view
to realigning it with WTO provisions.
Question 10: SERVICES
Nigeria maintains some legislation that restricts fo reign participation in the sector, with a view to
increasing the participation of domestically ownership in international trade.  Would like to know if
there are any plans for further liberalisation on top of the current commitments under GATS, under
the country’s comprehensive maritime policy.
Answer: Foreign participation is allowed subject to the UNCTAD 40-40 - 20 formula.
Furthermore, in the inconclusive Maritime Transport Negotiations due to resume in the year 2000,
Nigeria made an improved offer on all the three pillars, and that offer has not been withdrawn.
Meanwhile, Nigeria’s National Shipping Policy is under review, and the ultimate objective is
increased liberalisation in the context of globalisation.  Further commitments will be based on abalanced outcome of the negotiations.
Would like to know Nigeria’s specific plan to im prove the supply of telecommunications services and
increase foreign participation in the sector.
Answer: The Nigerian Telecommunications Limited (NITEL) is the major public sector
parastatal providing communication services.  Since the last review of 1991, government has
permitted private sector investment, both local and foreign in the communications sector.  As a result,
there are now about 40 private companies providing communication services especially in Lagos
where subscribers can now get telephone lines within 48 hours.
Question 11: IMPORT LIBERALISATION
What steps are being taken by the Nigerian Government to eliminate all existing items on the Import
Prohibition List.
Answer: Nigeria has drastically reduced the items on the Import Prohibition List since the last
review and a programme is being considered by Government to phase out the remaining items.
Question 12: FRAUDULENT LETTERS
Australia currently has only limited commercial interests in Nigeria, while there are commercial
opportunities that could be developed  there is reluctance on behalf of Australian companies to engage
with the Nigerian public or private sector because of the continued proliferation of fraud lettersemanating from Nigeria.  As a result of the fraud letters, Australian companies lack confidence in
doing business with Nigeria.  We would appreciate advice of what measures Nigeria has taken to
stamp out this illegal practice?WT/TPR/M/39/Add.1
Page 4
Answer: To deal with the issue of fraud letters, the Government of Nigeria has established the
Special Investigation Panel on Trade Malpractices under the Trade Malpractice (Miscellaneous
Offences) Decree No. 67 of 1992.  The Law provides that  all foreign companies must seek and obtain
status reports on Nigerian companies from the Federal Ministry of Commerce & Tourism before
entering into any business relationships with such companies;  and any business proposal/letter
received by any foreign company with only post office box number, telephone or fax numbers butwithout business local address should not be honoured;  all foreign companies are to request for
immediate verification on any urgent business proposal at the Federal Ministry of Commerce &
Tourism, Abuja, before advancing any fee - paymen t; and, all foreign companies must ensure that all
letters of credit, cheque, bank drafts or such other documents intended for payment are confirmed by
their bankers before shipment of goods are made.
In the task of educating foreign governments and business communities about the afore-
mentioned guidelines, our Missions abroad have had to organise lectures, seminars, and pressconferences with the Organised Private Sector (OPS)  in their countries of accreditation.  They have
also held discussions with relevant arms of their host governments.  Furthermore, paid advertisements
are regularly placed in major local and international Newspapers and Magazines in order to further
expose these activities.  A National Business Directory compiled by the Corporate Affairs
Commission will immensely complement the above stated measures in guiding investors as well asimporters and exporters against this malpractice.  Consequently, a sharp decline in the number of
trade complaints against Nigerians has been recorded in recent times.
Question 13: MINING
We understand that the Nigerian Government is looking at mining law reform as a means of
encouraging foreign investment.  Currently, the Government receives revenue through a complicatedarrangement of VAT income tax, capital gains tax and company tax worth approximately 30% in
addition to royalties and ownership arrangements.  The Nigerian Minerals Act of 1946 vests Minerals
ownership in the Federal Government.  It would be appreciated if Nigeria would confirm when a
review of the mining law will take place and if it is intended to address issues such as simplification
of mining taxation and conditions for paying compensation to land owners.
Answer: Government has begun review of the relevant sections of the Minerals Act
(cap 226 LFN 1990) in order to encourage foreign investment in the solid minerals sector under the
auspices of the Ministry of Solid Mineral Resources.  It is important to note that the Value Added Tax
(VAT) is a simplified tax on consumption not production.  Also, the capital gains tax has been
abolished with effect from 1 January 1998.  So there is ample opportunity for foreign investment as
the playing field is being levelled.  As regards compensation to land owners, the already existing land
use Decree of 1978 provides the procedures for compensation.
Question 14: PRIVATISATION OF NITEL AND NEPA
A key promise in the Nigerian budget was that in line with earlier business recommendation the
Government would in 1998 privatise NITEL, the telecommunications authority, and reorganise
NEPA, the electric power authority, for privatisation.  It would be appreciated if Nigeria would advise
under what conditions foreign investors would be able to participate in the privatisation of theseorganisations.
Answer: To implement this initiative, and in the light of the importance Government attached
to this undertaking, a National Committee on Privatisation is being established under the
Chairmanship of the Head of State.  With rega rd to the conditions under which foreign investors
would be able to participate, this regulation contained in the Nigerian Investment are being workedout by a team of experts on privatisation set up to advise the Committee.          WT/TPR/M/39/Add.1
                                 Page 5
Question 15: OIL AND GAS
Australia has for some time received representations about environmental concerns associated with
Nigeria’s oil and gas production.  Can Nigeria advise if it has considered whether compliance with
internationally accepted environmental wastage and emission control methods and standards would
improve the efficiency of its oil and gas production?
Answer: The flaring of gas in the oil producing areas has adverse consequences for the
environment.  In the past, government had concentrated on penalising oil companies that flared gas.
Emphasis has however, shifted from penalties to provision of incentives for the investment in the gas
sub-sector.  These incentives include duty and VAT free import of machinery and equipment, tax
holidays, tax deductible interest on loans for gas projects, investment capital allowances and tax free
dividends for a period of five years.  In response to these incentives for example, Chevron and
SASOL have jointly undertaken investment on gas to liquids products plants for 2000 bpd.
Question 16: SAFEGUARDS
Australia has expressed concerns in the Committee on Safeguards in respect of Nigeria’s claims for a
waiver from its Article 12.17 obligations.  Australia does not accept Nigeria’s argument that any trade
restrictive measure taken before entry into force of the WTO but now in breach of its WTO
obligations can be claimed to be a pre-existing measure under Article 10.  How does Nigeria plan to
address the concerns put to it by Australia at the last Safeguards Committee meeting concerningcoverage of its import prohibitions on Wheat, flour, sorghum, millet, gypsum and kaolin.
Answer: As already stated elsewhere under paragraph D above, the import prohibition list is
under active review.Question 17: BALANCE-OF-PAYMENTS RESTRICTIONS
The consultations with Nigeria held by the Balance-of-Payments Committee in April 1998 ended with
no agreement as to Nigeria’s coverage under GATT Article XVIII (Balance-of-Payments).  The effect
of this is that Nigeria is in breach of its WTO obligations as long as it maintains import restrictions on
certain poultry items and eggs, beer and stout, barley and malt, and mineral and similar waters.
WT/BOP/N/32 refers.  What action has Nigeria taken to bring its measures into WTO conformity?
Answer: All of the items mentioned have been removed from the Import Prohibition List.
Question 18: TARIFF STRUCTURE
What is the reason why the highest levels of duty are levied on consumer goods?  Does not such high
level of duties negatively affect people’s purchasing power and consequently preventing Nigeria’s
economy from becoming more active?
Answer: The overall objective of Nigeria’s tariff structure 1995-2001, is to stimulate
competition and efficiency by reducing tariff on consumer goods items relative to tariffs on raw
materials and intermediate goods.  Consequently and in order to provide for the necessary adjustment,while tariff on raw materials are relatively low at the beginning of the schedule.  They have been
progressively increased over the period vis-à-vis consumer goods.  The purpose is to allow time for
the necessary adjustment by business enterprises.  The observed high tariffs are targeted on luxury
consumer items.
Question 19: IMPORT PROHIBITION
The Secretariat report stated that import prohibition stimulate smuggling activities and depriving
Government of tariff revenue.  Does the Nigerian Government have any policy to improve this
situation.WT/TPR/M/39/Add.1
Page 6
Answer: Nigeria has continued to reduce items on the import prohibition list.  It is noted
however, that the problems associated with Port operations have contributed more to smuggling than
import prohibitions.  In realisation of this fact, Government has already started a reform of the
Customs and Port operations (for details see Government Report (i) paragraph 21-25).
Question 20: IMPORT PROHIBITION
Please, explain the reason why the import prohibitions of Kaolin notified in 1994 is not mentioned in
the Report.
Answer: The situation as notified in 1994 has not changed.
Question 21: TAX EXEMPTION
Provide a detailed explanation of subsidies and tax exemptions that are available for other exports as
mentioned in the Report.  For what products are these subsidies and exemptions available?
Answer: The incentives which include Duty DrawBack Scheme, Export Expansion Grant,
Manufacture-In-Bond schemes are designed to stimulate non-oil export but are not product specific.
Question 22: IMPORT RIGHTS
The Report states that a limited number of public companies enjoy exclusive import rights.  Is there
any reason why such public companies are given the privilege.  Does the Nigerian Government have a
plan to implement any specific competition policy to ensure market efficiency.
Answer: The reference here is made to importation of refined petroleum products by the
Nigerian National Petroleum Cor poration (NNPC).  It is important to state categorically that
importation of fuel into Nigeria is only an emergency measure during fuel crisis occasioned by
breakdown in the nation’s refineries.  Nigeria with its four refineries has the capacity to supply all of
its petroleum requirements with surplus for export.
Question 23: NIGERIAN PORTS
The Report states that Nigerian Ports are placed at  a disadvantageous position vis-à-vis those in other
countries in the region and formal imports are discouraged because of multiple fees and unnecessarily
high rates.  Does the Nigerian Government have any plan to improve this situation.
Answer: Refer to answer to question number 19.
Question 24: TARIFF BINDINGS
The Secretariat report stated that only 6.5% of all tariff lines were bound.  What is the reason whereby
the rest of tariff lines were not bound during the Round?  Does the Nigerian Government have any
plan for binding the rest of the tariff lines?
Answer: During the Uruguay Round, developing countries had the latitude to bind tariffs
consistent with their level of development.  Further binding of the remaining tariff lines will be
considered during the next negotiations.
Question 25: MFN
By what rules and procedures have the previous anti-dumping duties been incorporated into customs
duty applied on an MFN basis?  How are they different from Safeguard measures.
Answer: Refer to answer on question 3 from Hong Kong.          WT/TPR/M/39/Add.1
                                 Page 7
Question 26: ANTI-DUMPING AGREEMENT
The Secretariat Report states that the 1958 legislation has been under review since 1991.  Could
Nigeria provide information about the current status of the review.
Question 27: Article 18.5 of Anti-dumping Agreement provides that the WTO member shall
inform the Committee of any change in its law and regulation relevant to the Agreement.  When will
the registration on anti-dumping and countervailing duty be notified to WTO.  Is the registrationconsistent with WTO rules?
Answer to questions 26 and 27:
The review exercise is at an advanced stage and would be duly notified as soon as the new Law is
promulgated.  Every efforts is being made to ensure that these legislation is consistent with WTO
rules.  In this regard necessary technical assistance is being arranged with the WTO Secretariat.
Question 28: IMPORT PROHIBITION
Import Prohibition for the purpose of protecting domestic industries cannot be justified under the
WTO Agreement.  What is the view of the Nigerian Government on the consistency of such
prohibitions with the WTO Agreement?
Answer: The Government of Nigeria fully recognises its responsibilities under the relevant
WTO Agreements.  Presently, there is a programme which is being studied by Government to
comprehensively address the issue of all items on the import prohibition list as soon as possible.  Thefinal outcome of this programme would be fully notified to the WTO.
Question 29: IMPORT PROHIBITION FOR DOMESTIC PRODUCTS
Import Prohibition for the purpose of protecting domestic industries cannot be justified under the
WTO Agreement.  What is the view of the Nigerian Government on the consistency of such
prohibition with the WTO Agreement.
Answer. Refer to answer to question 11.
Question 30: IMPORT PROHIBITION LIST
In which case the importation of products on the import prohibition list may be allowed as part of
foreign direct investment contracts.  Which products have been allowed to be imported so far?
Answer: This issue essentially concerns the welfare for expatriate staff of contracting
companies.  The items involved are beverages, food items, furniture, etc.  These items have already
been removed from the import prohibition and no special approval is required any longer for their
importation.
Question 31: SPECIAL LICENCE
In what case does the Head of State grant licences for import prohibition goods.  What products have
been allowed to be imported so far.
Answer: Refer to answer 30 above.
Question 32: SECOND-HAND CLOTHING
What is the reason and justification under the WTO Agreement for the import prohibition of second-
hand clothing?  What is the reason for the fact that second-hand clothing constitutes one of Benin’s
main import for re-export to Nigeria despite the import prohibition.WT/TPR/M/39/Add.1
Page 8
Answer: The import prohibition on second-hand clothing in Nigeria is justified under
Article XX (b) of GATT 1994.  There is no formal trade between Nigeria and Benin Republic in
second-hand clothing.  All claims of re-export of second-hand clothing by Benin Republic and others
are illegal.
Question 33: IMPORTATION OF MEAT
What is the reason and justification under WTO Agreement for import ban on all types of meat?
Answer: Nigeria no longer maintains impor t prohibition on meat and meat products.
Question 34: BOP RESTRICTIONS
The Committee on Balance-of-Payments Restrictions concluded in 1996 that Nigeria’s import
prohibitions could not be justified for BOP reason.  Please, provide the reason why these prohibitions
cannot be eliminated immediately despite the conclusion of the BOP Committee.  What is the view of
the Nigerian Government on the Consistency of maintaining such prohibition with WTO Agreement?
Answer: Refer to answer to question 28.
Question 35: PROCUREMENT OF LOCALLY PRODUCED GOODS
According to the explanation of your government quoted in paragraph 83 of the Report, all Federal
Ministries and parastatals should buy locally produced goods while there has been no regulation
giving preference to domestic suppliers over foreign suppliers.  In view of the future development of
trade and investment in your country as well as enhancing transparency of its governmentprocurement procedures, would it be appropriate to adopt the open tendering procedure in principle
and, if necessary to specify and make public such elements as items procuring entities and the
thresholds subject to the “Buy-Nigerian Policy”?
Answer: Refer to answer to question 6.
Question 36: GPA
In the course of the future review mentioned abov e, would it be possible for your government to
participate in the on-going review work as an obser ver and the subsequent negotiation in the future on
the GPA under the WTO, given the fact that your country, if not a signatory eventually, joined the
negotiating group with its offer for making the GPA under the GATT (effective since 1981).
Answer: Nigeria is presently in the process of implementing the Uruguay Round, Agreements
and the GPA is one of the areas under consideration.
Question 37: INCENTIVES
The following programmes: that firms purchasin g locally manufactured plant, machinery and
equipment for their own use would be entitled to 15 % investment tax credit on such assets; that a tax
credit of 20% is granted to industries attaining minimum levels of local raw materials sourcing and
utilisation; that certain export incentives are conditional on local content may constitute prohibited
subsidies under Articles 3.2 of SCM Agreement.  Did they exist before 1995?  What is the view of theNigerian Government on the consistency of these programme.
Answer: The incentives have been in existenc e before 1995.  Government is now conducting
an analysis of these incentives with a view to making them WTO consistent where applicable.
Question 38: TRADE RELATED INVESTMENT
Please provide detailed information about all trade related investment measures Nigeria maintains at
present (including local content requirement by incentive under the industrial policy etc).  Nigeria has          WT/TPR/M/39/Add.1
                                 Page 9
to eliminate those trade related investment measures until 2000.  Please, provide the schedule to
eliminate.
Question 39: According to paragraph 8-87 of the Report, the Government of Nigeria seems to have
some incentive schemes under its Industrial Policy.  What is the view of the Nigerian Government on
the consistency of these measures with the obligations under the TRIMS Agreement?
Answer: Answers to be provided in due course for Questions 38 and 39.
Question 40: PRE-SHIPMENT INSPECTION
The Report states that Nigeria’s Pre-shipment Inspection system is described as expensive and
inefficient by representatives of Nigeria’s private sector and it is not clear whether quantity control
has actually improved following the appointment of private inspection firms.  Does the Nigerian
Government have any plan to improve the system.
Answer: The Nigerian Government has plans to improve the system.  Once ASYCUDA and
Advanced Cargo Information systems are in place, pre-shipment inspection will be phase out.
Question 41: EXPORT PROHIBITION
Nigeria’s export prohibitions in order to encourage local processing or ensure self sufficiency in the
home market cannot be justified under the WTO Agreement.  What is Nigerian Government’s view
on the consistency of these prohibition with the WTO Agreement?
Answer: Items on export prohibition list are constantly under review.  Since the last trade
policy review, items such as cassava, maize, yam and beans have been removed from the list.  The
remaining items will be removed as soon as possible.
Question 42: CASSAVA PRODUCTION
The Report states in paragraph 106 that the lift of the export ban on cassava tuber led to an increase in
cassava production.  Will the Nigerian Government have any plan to lift the export ban on otheragricultural products so that the same positive effect on agricultural production as cassava tuber case
could be expected?
Answer: Yes.  Refer to answer to question 41.
Question 43: IMPORT PROHIBITION
When will the import prohibition on sorghum, millet and wheat flour be eliminated?Answer: Refer to answer to question 28.
Question 44: VOLUME OF IMPORT
What is the estimate of informally imported volume of these products.
Answer: It is very difficult to estimate the volume of transactions on these items.
Question 45: TEXTILE AND CLOTHING PRODUCTS
Why has not Nigeria carried out its programme for the integration of the textile and clothing products
into GATT.  Articles 26-28.
Answer: Nigeria is presently in the process of implementing the Uruguay Round Agreements
and the Agreement on textiles and clothing, are some of areas under consideration.WT/TPR/M/39/Add.1
Page 10
Question 46: INFORMAL IMPORTS OF TEXTILE
Does the Nigerian Government have any plan to cope with informal imports of textile?
Answer: The on-going customs reforms are expected to address the problem of enforcement in
the informal sector.Question 47: LEGISLATION
Nigeria should move expeditiously to begin to develop the legislation necessary to give the WTO
agreements it nominally acceded to on 1 January  1995 the force of law.  Such a public and concrete
ratification of WTO policies would greatly enhance the attractiveness of Nigeria as an investment
destination.  Nigeria should also notify to the relevant Committees its current legislation and seek
their assistance in identifying areas where new legislation is necessary to bring Nigeria into
conformity with the WTO.
Answer: Nigeria is already taking appropriate steps in this direction.
Question 48: TARIFFS
Nigeria’s current system of applied tariff rates, variable tariff rebates, special tariffs, and general
surcharges, described in Chapter III, section (ii), is unpredictable and untransparent, and places an
unnecessary burden on trade.  The customs tariff should be unified to a single tariff rate for each line
item. Nigeria should announce a schedule to bring its highest tariff rates down to commercially viable
levels that provide protection and revenue without encouraging customs fraud and smuggling.  To theextent that these tariffs are intended to encourage domestic output, it is worth asking whether Nigeria
should be diverting domestic resources to the production of goods that require a tariff of over half
their value to be competitive.
The extremely high level of “informal” imports generated by the current system enter Nigeria
essentially unregulated and untaxed.  High, economically unjustifiable, tariff rates are also ahindrance to domestic economic expansion and investment.  Selective tariff exemptions are variable
and un-transparent, and cannot counteract the depressive impact of such prohibitive tariffs.
Nigeria should expand the scope of its WTO bound tariffs, to help regularize customs charges and to
give businesses a much better sense of what to expect.
Answer: It should be pointed out that only the variable tariff rebate element of the Nigerian
tariff structure is subject to change on annual basis.  This rebate was introduced to address the
problems of exchange rate variation in 1995 othe rwise noted.  Further consideration on binding will
be taken in the context of future negotiations.
Question 49: QUOTAS, BANS AND LICENSING RESTRICTIONS
- Few, if any, of the current multiplicity of such barriers can be justified under WTO
provisions.  These barriers, on both imports and exports, are not temporary measures in any
reasonable sense of the term.
- Most of them are not applied in a manner consistent with WTO emergency relief
requirements, i.e,. that they be temporary and digressive, and that they be applied in the least
restrictive manner possible.
- Nigeria should announce a schedule for their removal, then stick to it, allowing tariffs to
regulate trade and to introduce a measure of competition into the market.
- Future use of WTO measures for emergenc y protection should be based on domestic
legislation and regulations fully consistent with WTO provisions.          WT/TPR/M/39/Add.1
                                 Page 11
- Nigeria has indicated that it has placed import prohibitions on millet , sorghum, wheat flour,
and gypsum for safeguard reasons even though it lacks WTO-consistent legislation on
safeguard measures (Chapter III, paragraph 50-51 of the Secretariat’s report).
- When will Nigeria enact such legislation? Could Nigeria explain the need for these
prohibitions for safeguard reasons since substantial quantities of these products have been
entering the country through informal channels?  Has Nigeria placed import restrictions onother products for safeguard reasons?
- Nigeria has characterized import prohibitions on products such as maize, corn and vegetable
oils and import licensing requirements on a number of restricted products as balance of
payments measures (Section III.(2), para 52-60).  These restrictions were never justified for
balance of payments reasons and are even less justified now that Nigeria has had years to
make the requisite structural changes.
- When is Nigeria going to eliminate these prohibitions and restrictions?- The Secretariat’s report (Chapter III, para 8) states that importers do not need to be registered
to import goods but that companies must be re gistered by the Corporate Affairs Commission.
- Does this mean that individuals or groups who are not companies can import goods without
restriction so long as the appropriate documentation is presented to the banks, customs, etc?
- We understand (Chapter III, para 59) that al l items under import prohibition require a permit
by the Head of State on the recommendation of the Tariff Review Board before they can be
imported.
- Could Nigeria explain what criteria the Tari ff Review Board uses to determine product
eligibility?
Answer: Nigeria has made advances in the aforementioned areas and would appreciate
technical assistance and cooperation to hasten the pace of reform.
Question 50: CUSTOMS VALUATION AND PRE-SHIPMENT INSPECTION
The use of differential exchange rates to value “official” and private sector imports is a clear violation
of GATT Article VII and the Agreement on Customs Valuation, since both methods cannot be
considered to meet the requirement of first use of “transaction value”.  The use of reference prices forcustoms valuation is also absolutely prohibited by GATT Article VII and the Agreement.  Nigeria
should move immediately to correct these practices.  The pre-shipment inspection system causes
unnecessary delays in trade and is inconsistent with the Agreement on Preshipment Inspection, Article
2, paragraphs 5, 6, and 14.-The ad valorem  fee charged for PSI is not consistent with Article VIII of
the GATT, and should be altered to reflect the actual cost of conducting the inspections.  Since these
inspections are mandatory, the Government of Nigeria has an obligation to ensure that they are
consistent with its WTO Obligations.
- Nigeria’s exemption of some countries from PSI while requiring it of others raises MFN
issues.  Nigeria should move expeditiously to eliminate its PSI requirements or apply them
equally to all WTO members.
- How does Nigeria decide what countries can be exempted from preshipment inspection
requirements?
- Are any of the customs requirements fulfilled by PSI firms related to import certification
requirements associated with standards or sanitary issues?WT/TPR/M/39/Add.1
Page 12
- What is the basis for the use of different PSI companies (Table III.1) to inspect the goods of
different countries?  If goods are inspected in the port of export and receive a clean report of
findings are they still subject to reinspection by the inspection company and/or Customs upon
arrival in port in Nigeria?
Answer: The Preshipment Inspection has b een reinstated pending the completion of
ASYCUDA scanning equipment. The operation is large and one company cannot cover the whole
world.  There is counter inspection by customs on arrival.
Question 51: Chapter III, paragraph 15 indicates that Nigeria’s PSI firms rejected 50% of the
submissions of Modified Form M by importers.  Could Nigeria explain the reasons for this high rate
of rejection?  Are there any other charges for PSI other than the 1% ad valorem  charge noted? What
customs charges face imports and exports not required to undergo PSI?
Answer: The rejection is based on not meeting standard requirements for importation.
Virtually all imports are subject to PSI where they were not inspected, they would be subject to
destination inspection on arrival.
Question 52: We note that Nigeria has delayed implementation of the Customs Valuation
Agreement (Chapter III, para 22). What steps is Nigeria taking to move application of the Agreement
and to prepare itself to implement it fully at the end of the transitional period?
- We are pleased that Nigeria is attempting to improve efficiency and transparency of its
customs procedures by computerizing them and by transferring responsibility for import duty
collection from the Customs service to banks (Chapter III, para 25 and 28).
- We wonder, however, why importers are still unable to clear their consignments in less than
48 hours and why there is no rapid clearance procedure for perishable goods.  Why has the
computerization not led to more rapid clearance of consignments?
- Could Nigeria explain what the “annually determined rebate of 25%” is in reference to
(Chapter III, para 3)?  Is it a rebate of customs duties?  Are all imported goods other than the
products listed in footnotes 17 and 18 accorded a 25 percent rebate of customs duties?  When
is the rebate made and who or what agency makes it?
Answer: A Valuation Implementation Committee has been in place and a Draft Valuation
Code produced by this Committee has been approv ed by the World Customs Organisation (WCO) for
onward transmission to the WTO.  The Ports and Customs Reforms are still in progress.  Equally the
computerisation programme is not yet completed.  All perishables are subject to pre-release by the
Customs.  The variable rebate is in respect of raw materials which were adversely affected by
exchange rate variations and does not apply to anything else.  The rebate was introduced in 1995 and
the agency responsible is the Federal Ministry of Finance based on approval by the Federal Executive
Council.
Question 53: EXPORTS AND OTHER SUBSIDIES
Nigeria’s tax and other incentives for the domestic use of locally manufactured plant, machinery and
equipment, and raw materials, as well as export incentives conditioned on local content, would appear
to be prohibited subsidies within the meaning of Article 3 of the SCM agreement.  We urge Nigeria to
review these measures along with others brought to its attention in the WTO Subsidies Committeewith a view to elim inating them.  If, as indicated in Section III, para 111 of the Secretariat’s report,
Nigeria believes these measures to be covered by Article 27.2 of the Agreement, we would appreciate
a statement by Nigeria stating clearly its intent to eliminate such measures as provided for in that
section.  Please indicate the date by which Nigeria intends to eliminate the prohibited subsidies
referred to in paragraphs 86, 87, 110, and 111.          WT/TPR/M/39/Add.1
                                 Page 13
Answer: The matter is before the Committee on Subsidies and Countervailing Measures and
Nigeria will cooperate fully with the Committee.
Question 54: PETROLEUM
Nigeria is the world’s seventh largest oil exporter and oil accounts for 95%.  All oil production in
Nigeria takes place through joint ventures between foreign oil companies and the Nigerian National
Petroleum Company (NNPC).  Under the joint venture agreements, the foreign partners turn over 60percent of their production to the NNPC.  The NNPC then markets this oil to international traders.
The process by which the NNPC’s oil is sold to traders lacks transparency.  There are allegations of
fraud and misuse of funds.  A World Bank audit in 1997 found a discrepancy of 15% between
NNPC’s production share and the volume of contracts reported through official channels.  Given the
importance of oil exports to Nigeria’s foreign trade, and Nigeria’s global importance as an oil
exporter, we urge Nigeria to increase the transparency of NNPC oil sales.  This could be
accomplished by opening the details of NNPC sales to public scrutiny or by soliciting tenders forNNPC export contracts through an open bidding process.
Answer: Government has recognised some of these problems and has appointed two foreign
companies to act as oil inspection agents.  In addition, the Directorate of Petroleum Resources (DPR)
has been strengthened for better surveillance.
Question 55: SERVICES
The Secretariat’s report indicates that the regulatory framework of the Nigerian services sector,
characterized by dominance of the public over the private sector, has not been conducive to growth.
Recognizing the vital role of services in building the infrastructure that Nigeria requires to become
better integrated into the global economy, could Nigeria provide information on the following: current
market access restrictions in the services sector that are likely candidates for eventual liberalization,such as foreign ownership restriction, economic needs tests, quantitative limitations on the number of
foreign service suppliers in the market, and residency requirements; unilateral services liberalization
or deregulation that has taken place since the conclusion of the Uruguay Round (1993), such as
removing quantitative restrictions on the number of licensed services providers or removing
discriminatory requirements (often nationally-based ) to qualify for a required license; changes in laws
and regulations required to implement market opening and national treatment commitments made as a
part of the WTO Agreement on Financial Services?  (Note: WTO members agreed to ratify the
agreement by 29 January 1999 and have it enter into force on 1 March 1999.  End note).
In telecommunications, the privatization of NITEL is  reportedly not going to occur in 1998.  Instead,
the government will attempt to establish a second national carrier.
Will the second national carrier be restricted to competition in long-distance and international services
or will they also be allowed to compete in domestic services?  What is the level of competition that is
going to be allowed?  Will NITEL still possess a quasi-monopoly over the telecommunications
market? Chapter IV, para 159 of the Secretariat’s report reads that “(private companies) must no
longer use NITEL’s Intelsat facilities for international connections”.  Does this prohibit the use of
NITEL’s facilities for interconnection?
Answer: The information required would be provided at a later date.
Question 56: INTELLECTUAL PROPERTY RIGHTS
Nigeria is party to most international agreements on intellectual property rights.  Yet, as the
Secretariat’s report notes (Chapter III, para 161), enforcement of existing laws remains weak,
particularly in the patent and trademark areas.  Most companies do not bother to secure trademark or
patent protection because it is generally considered ineffective.WT/TPR/M/39/Add.1
Page 14
- Nigeria is generally considered to be the largest market in Africa for pirated goods from third
countries and production and sales of pirated tapes, videos, computer software, and books
remain widespread in Nigeria.
- In view of these problems, please outline in detail Nigeria’s plans to make its intellectual
property regime consistent with the requirements of the TRIPS agreement by 1 January 2000
deadline.
Answer: Nigeria is now reviewing its laws on intellectual property rights to make it WTO
consistent.Question 57: INVESTMENT
While government funds may be useful in supplementing private investments, the Secretariat’s report
outlines rather clearly the economic costs associated with excessive Government direct involvement
in what should be commercial investments.
- Provision of trade distorting investment subsidies is not only inconsistent with WTO
obligations, but has undeniably resulted in the creation of uneconomic and unprofitable
investments that continue to drain public funds and private purchasing power.
- In order, however, to attract large-scale private sector interest in rescuing the economy from
these liabilities, Nigeria must address the underlying policies that have contributed to their
lack of profitability.
- Price controls on, for example, refined oil products, electricity, and telecommunications
should be phased out and replaced by the application of a vigorous competition policy.
- Establishment of well-defined, stable, govern ment institutions and of a strong, independent
judicial system would also go a long way towards boosting investor confidence.
Answer: The observations are noted.
Question 58: BILATERAL AND REGIONAL AGREEMENTS
Please describe the provisions and the status of the bilateral agreements listed in Chapter II,
paragraph 49.  Do any of them provide for tariff or other trade preferences?  Which of their provisions
remain unimplemented?  What is Nigeria doing to implement its trade and investment liberalization
commitments as a member of ECOWAS?  Does Nigeria still intend to implement the tariff reductionscalled for?  What progress has Nigeria made in meeting the objectives to the revised Treaty of 1993,
e.g., the establishment of a common market?
Answer: Please refer to answer to question number 2.
Nigeria has committed itself fully to ECOWAS but other member-states are lacking behind in their
commitments.
Question 59: IMPLEMENTATION OF WTO AGREEMENTS ON TECHNICAL BARRIERS TO
TRADE AND SANITARY AND PHYTOSANITARY MEASURES
Has Nigeria enacted any standards or legislation or regulations dealing with standards and sanitary
issues since 1 January 1995?  If so, have these been published in advance for comment?  Have these
technical requirements been notified to the WTO?  If no, why not?
Please explain how the import ban on meat meets the criteria in the WTO SPS agreement concerning
risk assessment and sound science?  What steps is Nigeria taking to address the BSE issuesscientifically, as required by the Agreement?          WT/TPR/M/39/Add.1
                                 Page 15
Answer: Answers to be provided later
Question 60: LABOUR
Question 61: BOP IMPORT RESTRICTIONS
The EC is concerned by Nigeria’s maintenance if import restriction by reference to GATT
Article XVIII, despite the fact that it no longer has coverage under this provision.  For the past years,
it has been clear that the Nigerian balance of payments situation does not justify the continuedrecourse to GATT Article XVIII.  Nigeria is therefore under an obligation to eliminate import
restrictions under Article XVIII:B(11).
Nigeria has had a significant period of time to eliminate these import restrictions.  The Balance of
Payments Committee has suspended consultations four times in a two-year period, to allow for
Nigeria to bring its measures into conformity w ith WTO rules.  The long duration of continued
application by Nigeria gives rise to the more concern.
The EC give a high priority to the correct application of the WTO balance of payments provision, so
as to ensure that this special provision may be used by Members that face a balance of payments crisis
requiring temporary measures, and by those Members only.
The full respect of GATT Articles XII and XVIII and the UR Understanding is of great importance,
and in recent years many Members have indeed moved to disinvocation of GATT Article XVIII, as
their balance of payments position improved.  The EC urges Nigeria to follow and eliminate
remaining import restrictions without further delay so as to bring this element of its trade policy into
conformity with WTO rules.  The EC would appr eciate an explanation from Nigeria as to its
intentions to do this.
Answer: Please refer to answer to question 28.
Question 62: PUBLIC PROCUREMENT
Given the high level of state intervention in the Nigerian economy, public procurement represents a
large, if currently unquantifiable area of trade and economic activity.  The lack of transparent
procurement rules and practices in Nigeria is a source of concern, as the WTO Report underlines.  The
EU has two questions.  First, does Nigeria agree that the establishment of an open and transparent
procurement regime is an essential element of institutional and economic reform, enabling optimumuse of public funds?
Second, would Nigeria provide Members with information on how its public procurement regime
operates, including the legal/regulatory basis for that regime, information on the principal
procurement agencies and value of goods procure in recent periods, and information on the extent and
conditions for foreign firms to participate in procurement in Nigeria.
Answer: Refer to answer to question 6.
Question 63: IMPORT LANDING CHARGE
The WTO notes that whereas Nigeria has abolished excise duties for domestic goods, it retains a
system of import landing charges for imported products, which was originally designed to mirror the
domestic excise duty.  Is it Nigeria’s intention to remove the import landing charge in order to remove
this differential treatment?.
Answer. A suitable adjustment is being worked out.WT/TPR/M/39/Add.1
Page 16
Question 64: SIMPLIFICATION OF TRADE PROCEDURES
The WTO’s report notes in several areas the negative trade consequences of inefficient and
untransparent import and export procedures, excessive documentation and bureaucratic requirements
for traders, and problems associated with customs clearance and port management, which collectively
impede and create additional expenses for both importers and exporters, and encourage smuggling.
Nigeria itself has recognised that unnecessary costs represent about 45% of the cost of gettingcustoms clearance (p.35 of the Report, para 29) .  Against that background, could Nigeria please
provide further details of planned reforms to trade procedures (only the planned use of the
ASYCUDA electronic clearance system by customs is mentioned)?  Does Nigeria agree that the WTO
work programme on trade facilitation can usefully bring guidance and multilateral co-ordination over
this field that can be helpful to Nigeria as it moves towards simplified trade procedures?
Answer: Yes.  Nigeria is fully implementing the KYOTO Convention.
Question 65: EXPORT CHARGES
The WTO report notes that one effect of Nigeria’s PSI scheme for recording export values seems to
have in fact impeded the country’s export performance.  Has Nigeria any plans to change the scheme
to reduce the burden on exporters?
Answer: Refer to answer to question 40.
Question 66: CUSTOMS VALUATION
Can Nigeria indicate what steps it is taking to ensu re that it can comply with all the requirements of
the WTO Valuation Agreement - and in particular the use of transaction value - once the transitional
period for implementation of the Agreement expires?
Answer: Refer to answer to question 50.
Question 67: INTELLECTUAL PROPERTY RIGHTS
Lack of adequate protection of IPR is an important concern for EC companies and a perceived
disincentive for trade and investment in Nigeria.  We therefore attach importance to enhanced IPR
protection, and would ask Nigeria to provide details on the additional legal, enforcement and other
steps it will take, and the timetables thereof, in order to ensure full compatibility with the TRIPS
Agreement within the given deadlines for compliance.
Answer: Refer to answer to question 56.
Question 68: REGIONAL INTEGRATION
The EC supports the broad objectives of the ECOWAS arrangement in which Nigeria participates.
Improvement and liberalisation of regional trade appears to be an essential factor in developing
Nigeria’s trade and economic strength.  In this respect we would request Nigeria to provide
information on whether the phased tariff under ECOWAS is proceeding according to schedule;  and,
how existing technical regulations applied to goods by different ECOWAS members, will beaddressed under ECOWAS.
Answer: Refer to answer to question 58.
Question 69: FUTURE LIBERALISATION
The WTO report highlights in many areas of its report the contrast between the economic and trade
performance of those goods or service sectors that have been privatised, opened to overseasinvestment or otherwise liberalised, and those whic h either remain under state control or which are
subject to extensive trade protection measures.  In the light of that, does Nigeria share the view of the          WT/TPR/M/39/Add.1
                                 Page 17
EU that further, comprehensive liberalisation under  WTO, with the effect of reducing further the
degree of state intervention in the private sector, and the degree of protection or control over both
export and import trade, will be a necessary element in support of Nigeria’s longer term Vision 2010
Reforms?.
Answer: The progressive liberalisation of the Nigerian economy as well as the enhancement of
increased private sector participation in all econom ic activities have been fully enshrined in the
Vision 2010 programme.
_________