98-2716 MOREPRESS RELEASE
PRESS/TPRB/78
25 June 1998
 TRADE POLICY REVIEW BODY
REVIEW OF NIGERIA
TPRB'S EVALUATION
The Trade Policy Review of the World Trade Organization (WTO) concluded its second review
of Nigeria's trade policies on 23 and 24 June 1998. The text of the Chairperson's concluding remarks is
attached as a summary of the salient po ints which emerged during the discussion.
The review enables the TPRB to conduct a collec tive examination of the full range of trade
policies and practices of each WTO member country at  regular periodic intervals to monitor significant
trends and developments which may have an impact on the global trading system.
The review is based on two reports which are prepared respectively by the WTO Secretariat and
the government under review and which cover all asp ects of the country's trade policies, including: its
domestic laws and regulations; the institutional framework; bilateral, regional and other preferential
agreements; the wider economic needs and the external environment.
A record of the discussions and the Chairpers on's summing-up, together with these two reports,
will be published in due course as the complete trade policy review of Nigeria and will be availablefrom the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992), Australia
(1989 & 1994), Austria (1992), Bangla desh (1992), Benin (1997), Bo livia (1993), Botswana (1998),
Brazil (1992 & 1996), Cameroon (1995), Canada (1990, 1992, 1994 & 1996), Chile (1991 & 1997),
Colombia (1990 & 1996), Costa Rica (1995), Côte d'Ivoire (1995), Cy prus (1997), the Czech Republic
(1996), the Dominican Republic (1996), Egypt (1992), El Salvador (1996), the European Communities
(1991, 1993, 1995 & 1997), Fiji (1997), Finland (1992), Ghana (1992) , Hong Kong (1990 & 1994),
Hungary (1991), Iceland (1994), India (1993 & 1998), Indonesia (1991 and 1994), Israel (1994), Japan
(1990, 1992, 1995 & 1998), Kenya (1993), Korea, Re p. of (1992 & 1996), Le sotho (1998), Macau
(1994), Malaysia (1993 & 1997), Mauritius (1995) , Mexico (1993 & 1997), Morocco (1989 & 1996),
New Zealand (1990 & 1996), Na mibia (1998), Nigeria (1991 & 1998), Norway (1991 & 1996),
Pakistan (1995), Paraguay (1997) , Peru (1994), the Philippines ( 1993), Poland (1993), Romania (1992),
Senegal (1994), Singapore (1992 & 1996), Slovak Republic (1995), South Africa (1993 & 1998), Sri
Lanka (1995), Swaziland (1998), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand (1991
& 1995), Tunisia (1994), Turkey (1994), the United States ( 1989, 1992, 1994 & 1996), Uganda (1995),
Uruguay (1992), Venezuela (1996), Za mbia (1996) and Zimbabwe (1994).PRESS/TPRB/78
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MORETRADE POLICY REVIEW BODY
REVIEW OF NIGERIA
CONCLUDING REMARKS BY THE CHAIRPERSON
Over the past two days the TPRB has conducted the second review of Nigeria's trade policies
and practices.  These remarks, prepared on my ow n responsibility, are intended to summarize the main
points of the discussion, and they do not constitute a full report.  Details of the discussion will be
reflected in the minutes of the meeting, and you w ill recall that the Nigerian delegation provided written
replies in the context of this meeting.
The discussion developed under three themes:  (i) economic performance and institutional framework;
(ii) trade measures;  and (iii) sectoral issues.
Economic performance and institutional framework
Members welcomed the progress made since 1995 in restoring macro-economic stability, under
an extensive programme for private sector-led gr owth, encompassing the liberalization of foreign
investment and a reform of the capital market. Howe ver, they noted that development remained uneven
and social indicators were not improving.  Notin g that the economy remained dependent on oil export
revenues, members asked about future economic pros pects in the context of weak oil prices.  They
emphasized that  integration of the informal sector into the economy could increase tax revenue and
provide a more stable basis for trade.
Some Members stressed that the Nigerian economy had suffered from persistent political and
institutional uncertainty.  They emphasized that democracy, good governance and the rule of law were
fundamental to economic development and urged the new Government to continue the reform
programme, including the transition to democra tic civilian rule. Members stressed the need for
clarification regarding the new Government's plans to adopt well-defined constitutional arrangements.
Participants asked how the Government intended to address the problem of foreign public debt,
which was a serious burden on the economy.  It was al so noted that the use of a dual exchange rate
system distorted public sector accounts and was an obstacle to resumption of multilateral credits and
debt rescheduling.
Participants urged Nigeria to pass domestic legislation implementing the WTO Agreements
and, where necessary, to seek assistance from the re levant WTO Committees to bring its legislation into
conformity. Some members urged Nigeria to estab lish a consistent follow-up mechanism which would
provide a framework to measure achievements, implement further legislative amendments and define
technical assistance needs. Some Members asked how the ECOWAS trade liberalization scheme had
reinforced trading links among countries in the re gion, and what benefits it had brought to Nigeria.
In response, the representative of Nigeria obser ved that the uneven distribution of growth had
resulted from the lagged response of some sectors to the economic reforms undertaken in recent years.
The Government was making efforts to address th ese problems, particularly in manufacturing and
services. He recognized that the economy remained dependent on oil revenue, and that weak oil prices
would affect the Budget outcome.  However, fore ign exchange reserves of over US$8 billion, prudent
fiscal policies and budget adjustments would ensure  the effective implementation of the 1998 Budget.PRESS/TPRB/78
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MOREThe representative also pointed out that the stock of external debt had been reduced to
US$28 billion as of December 1996.  The Government intended to achieve sustainability of externaldebt service and debt stock by the turn of the century.  Reconciliation of the various debt estimates
continued;  Nigeria's total debt to the Paris Club members had fallen to just under US$19 billion on
31 December 1997.  On the dual exchange rate he noted that the use of the official rate was strictly
limited to settling public foreign debt payments  and transfers to Nigerian missions abroad.
The representative of Nigeria stated that a ne w constitution would be promulgated on 1 October
1998.  All laws that inhibited competition and reduced transparency were being reviewed.  An
interministerial committee had been established to advise on changes required to bring domestic
legislation into conformity with the WTO Agreements .  Gaps had already been identified in areas such
as intellectual property, government procurement,  anti-dumping, safeguards and customs valuation.
The representative noted that Nigeria's bilatera l agreements did not include preferential trade
arrangements.  Nigeria was participating activel y in the ECOWAS scheme, which however had been
hampered by the volume of informal trade within th e region and by the failure of some members to meet
their commitments.
Steps were being taken to integrate the informal  sector into the mainstream economy, including
setting up border markets, which the authorities expected would help reduce smuggling.
The representative of Nigeria indicated that technical assistance was required to study the
informal sector and develop the ECOWAS scheme.  Assistance was also needed to realign domestic
regulations with multilateral rules and develop the institutional capacity to implement the WTO
Agreements, notably on customs valuation.
Trade measures
While welcoming the reduction in tariff levels and dispersion since 1995, participants noted that
duties on consumer products remained high and that Nigeria's tariffs were subject to frequent changes;
they called for a simplification of the system by removal of annual duty rebates and import surcharges.
Predictability would also be enhanced by increas ing tariff bindings on industrial products, and closing
the gap between applied and bound rates.
Members noted that import procedures were cumbersome and lengthy; reference prices were
still in use;  the preshipment inspection scheme appear ed to be expensive, discriminatory and inefficient;
and Customs frequently re-evaluated upwards payable duty as assessed by the PSI companies.  In this
context, some Members asked about the Government's plans to introduce the ASYCUDA scheme for
customs data processing and how the Government in tended to comply with the provisions of the WTO
Customs Valuation Agreement by the end of the transitional period.
Members welcomed proposals submitted to the Nigerian Government to phase out all remaining
import prohibitions by the year 2000.  Meanwhile, some Members regretted the maintenance of import
prohibitions and sought clarifica tion on their WTO justification in the absence of WTO-consistent
domestic legislation on safeguard measures.
Members also questioned the coherence of Nigeri a's export policies.  They noted that several
prohibitions continued to restrict potential e xport diversification while administrative export
requirements, designed primarily to ensure repatriati on of export proceeds, also acted as a constraint to
export. In contrast, a wide array of export assistance instruments remained in place.
Public sector companies continued to dominat e large segments of the economy and trade,
accounting for 30-40% of fixed capital investment. Par ticipants deplored the lack of transparency inPRESS/TPRB/78
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MOREpublic procurement.  While welcoming the announcemen t of the privatization of several public entities,
including that of the telecommunications operato r before the end of 1998, Members emphasized the
need for a competition policy to ensure market efficiency.
Some participants noted the need for improved enforcement of intellectual property rights, and
asked for the Government's plans to bring its intell ectual property legislation into conformity with the
provisions of the TRIPS Agreement.
The representative of Nigeria replied that Nigeria's import and export regimes had undergone
several reforms since 1991 to establish a more stable framework for trade.  The overall objective of the
Nigerian tariff structure was to encourage efficien cy by reducing tariffs on consumer goods relative to
those on raw materials and intermediate products.
Customs clearance procedures were being reform ed to implement fully the Kyoto Convention.
Preshipment inspection was being applied across-th e-board without discrimination.  Documentation
requirements had been drastically reduced throug h the introduction of a Single Goods Declaration,
which was a first step towards implementation of the ASYCUDA scheme.  The objective was to allow
importers to clear goods within 48 hours.  Nigeria had also produced a draft Customs code that was
already approved by the World Cust oms Organization;  this code, and answers to the WTO customs
valuation questionnaire, would be forw arded to the Secretariat for comment.
The representative restated that prohibitions falling under balance-of-payments provisions
would be phased out by 1 January 2000:  and in this  regard, a notification would be submitted very soon.
In addition, his Government was studying a proposal  to address all remaining items on the Import
Prohibition List with a view to their eventual pha se out.  Licensing had been abolished except for
prohibited items allowed as part of foreign inve stment contracts, on which a 100% duty was imposed.
Anti-dumping duties were not incorporated into the tariff structure.  Nigeria did not yet have the
capacity to investigate dumping claims, but plans to  establish an investigating authority were under
consideration.
Nigeria provided export incentives but no subsidie s to trade.  The Government was reviewing
those incentives to ensure their WTO consistency.  There were no state-trading companies in Nigeria
and no import privileges were granted, except for t hose awarded to the national oil company as an
emergency measure following the breakdown of the c ountry's refineries.  There was no express policy
giving preference to local goods in government procurement.
The representative noted that a full description of Nigeria's technical regulations was already
available in WTO documents, and that Nigeria had complied with all its notification obligations under
the TBT and SPS Agreements.
Nigeria was reviewing its laws on intellectual property to make them WTO consistent.  Certain
legislative gaps and enforcement problems had been identified, and would be addressed in collaboration
with WIPO and WTO.  The authorities were also  aware of the need to ensure that appropriate
competition rules were put in place.
Sectoral issues
Members raised questions on various sectoral issues, including:
- The performance of the agricultural sector, wh ich was inhibited by certain import and export
prohibitions, despite recent liberalization of fertilizer imports and cassava exports;PRESS/TPRB/78
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-  Structural and environmental issues relating  to oil and gas production, which represented 95%
of export earnings and three-quarters of governme nt revenue, including fuel shortages resulting
from a breakdown of refinery capacity;
- The need for a reform of the mining law to encourage development of the solid mineral sector;
- Obstacles to industrial development stemming from the complexity of import and export
policies and the high level of Government intervention, and the prospects for reform;
- Obstacles stemming from infrastructural inadequacies in ports, transport, power and
telecommunications, and the prospects for impr ovements through privatization and other
measures to enhance efficiency.
In response, the representative indicated that ag ricultural trade had been further liberalized.  He
emphasized that there was no import ban on meat and meat products.  Measures to enhance competition
in the provision of infrastructure and foreign exchan ge were expected to improve prospects for industry.
Nigeria had begun a review of the Minerals Ac t to encourage foreign investment in the solid
minerals sector, while the capital gains tax had alr eady been abolished.  Nigeria recognized the adverse
environmental consequences associated with gas flaring and was providing incentives for producers to
decrease such practices.
Recognizing the problems associated with the ope ration of ports, the representative indicated
that the Government had already started a reform pr ogramme in that area.  The privatization of NITEL
would begin before end 1998, while the electricity utility NEPA was being reorganized in view of
privatization.  Nigeria's shipping policy was also unde r review with a view to liberalization.  A number
of other activities were already open to private inve stment, including banking, air and road transport.
***************
In conclusion, let me say that in this review, most Members have recognized the progress made
by Nigeria in macroeconomic and trade policies in r ecent years.  However, at the same time, Members
have pinpointed, in a clear and frank manner, a large number of governance, structural and
policy-related issues that still inhibit the development of Nigeria's economy and trade.
As Chairman, I welcome the frankness of the discussion and of the replies made by the Nigerian
delegation.  I hope that Nigeria's transition to a demo cratic regime – clearly signalled by the Delegation
– will resolve many of the serious concerns expres sed in this meeting rega rding governance, stability
and predictability of policies.  I welcome Nigeria' s identification of technical assistance needs, the
indications that have been given as to where su ch assistance can be found, and hope that the dialogue
initiated in the last two days can be continued.  I also trust that the questions and points raised by
delegations will be taken seriously into considerati on by the new administration in Abuja, and translated
into a positive programme of ongoing economic reform that can enable Nigeria and all its people in all
economic sectors to fulfil their considerable potential as a major economic power in Africa.
END