WORLD TRADE
ORGANIZATIONWT/TPR/M/39
6 November 1998
(98-4347)
Trade Policy Review Body
23-24 June 1998
TRADE POLICY REVIEW
NIGERIA
Minutes of Meeting
Chairperson:  H.E. Mr. Ali Said Mchumo (Tanzania)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON      3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF NIGERIA      4
III. STATEMENT BY THE FIRST DISCUSSANT      6
IV. STATEMENT BY THE SECOND DISCUSSANT      7
V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY      8
VI. REPLIES BY THE REPRESENTATIVE OF NIGERIA AND ADDITIONAL
COMMENTS    14
VII. CONCLUDING REMARKS BY THE CHAIRPERSON    18WT/TPR/M/39
Page 3
I INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Nigeria was held on 23-24 June 1998.
2. The Chairman (H.E. Mr. Ali Said Mchumo), introd ucing the review of Nigeria, welcomed the
Nigerian delegation headed by H.E. Dr. Emmanue l Udogu, Minister of Commerce and Tourism, the
discussants Ms. Florence Dobelle (France) and Mr. Moncef Baati (Tunisia), and Members of the Trade
Policy Review Body (TPRB).  The TPRB was to ba se its work on two reports, one submitted by the
Government of Nigeria (WT/TPR/G/39) and the other by the WTO Secretariat (WT/TPR/S/39).  Several
delegations had submitted advance questions in writing.WT/TPR/M/39
Page 4
II OPENING STATEMENT BY THE REPRESENTATIVE OF NIGERIA
3. The representative of Nigeria reaffirmed from the onset Nigeria's commitment to the principles of
the multilateral trading system, as demonstrated by the progressive pursuit of open and liberal economic
policies, administrative and regulatory reforms as well as the adoption of measures to enhance and ensure
a greater role for the private sector in the economy.  Since the last Trade Policy Review of Nigeria
in 1991, the Government had continued to implement fiscal, monetary and trade policy reforms toincrease predictability, transparency and certainty including fiscal discipline and macroeconomic stability.
In that regard, Nigeria had recorded modest achievements in the face of daunting challenges.
Nevertheless, the primary focus of policy remained the restoration of confidence in the Nigerian economy
in order to stimulate both domestic and foreign direct investment.
4. The performance of the Nigerian economy had remained mixed.  From a negative growth rate
in 1993, the Gross Domestic Product (GDP) recorded a positive growth rate of 1.3% in 1994.
Improvements of 3.3 and 3.8% were also recorded for 1996 and 1997, respectively.  The impetus forthese modest achievements could be traced largely to  developments in the agricultural, oil, building and
construction, and banking and financial services sectors of the economy.  Developments in the
manufacturing sector had remained sluggish, with serious consequences on overall economic growth and
on the objective to promote and expand non-oil exports.
5. A significant level of macroeconomic stability had also been achieved.  Stringent fiscal measures
had reduced overall fiscal deficit from N110 billion in 1993 to N87 billion in 1994.  Fiscal surplusses of
respectively N1 billion and N5 billion were recorded in 1995and 1996.  Interest and exchange rates had
been stable, and the inflation rate stood at about 8% in December 1997.  Foreign reserves also amounted
to US$7.7 billion at the end of the same period.  Nevertheless, the Nigerian economy remained vulnerable
to external developments.  In order to achieve sustainable economic performance, significant policychanges included the liberalization of the trade and investment regimes, administrative and regulatory
reforms and the initiation of long-term policies and measures to correct structural economic imbalances.
6. In particular, the Nigerian Enterprises Promotion Decree of 1988 had been replaced with the
Nigerian Investment Prom otion Commission Decree of 1995, which allowed for 100% foreign ownership
in all sectors of the economy; and guaranteed foreign investment against nationalisation andexpropriation.  Complementary to this, the Foreign Exchange (Monitoring and Miscellaneous Provisions)
Decree No 17 of 1995 permitted foreigners to invest in  stocks or money market instruments with foreign
capital legally brought into Nigeria.  The free repatriation of dividends accruing from such investment or
of capital in event of sale or liquidation was  al so allowed.  The significant improvements made to
Nigeria's commitments in the recently concluded WTO financial services negotiations demonstrated the
strong policy stance in these areas.
7. Consistent with the above policy initiatives, changes in domestic legislation with effect in 1998
aimed to liberalize the economy and remove all inhibitions to competition in the petroleum, mining,
energy and telecommunications sectors of the economy.  Existing monopolies were also to be privatised,
within a policy framework of "guided privatiz ation", beginning with Nigeria Telecommunications
Limited (NITEL) before the end of 1998.
8. The Government had also embarked upon other major administrative and legal reforms relating to
customs and port reforms, capital market reforms, tax reforms, and export incentives in order to reduce
transaction and business costs, provide a level playing field for investors and encourage competition and
efficiency to the benefit of the consumer.  The Vision 2010 Programme was  expected to provide a long-
term perspective on economic development and consolidate on the current market-oriented measuresWT/TPR/M/39
Page 5
being pursued.  Crucial to the success of the Vision 2010 was a programmed share of responsibilities
between the public and private sectors of the economy.
9. On the issue of import liberalization, following the last trade policy review, the range of tariffs
had been reduced by 50% in order to stimulate competition and efficiency, notably by reducing, tariffs on
consumer items relative to tariffs on raw materials and intermediate goods.  In a similar vein, the number
of items on the Import Prohibition List had been drastically reduced.
10. Recalling that consultations with Nigeria in the WTO Committee on Balance-of-Payments
Restrictions were deadlocked early in 1998 and that the matter was now before the General Council, the
representative of Nigeria announced that relevant Ministers had met, reviewed the concerns of Nigeria's
trading partners and had proposed to the Government a further reduction from five to three years of the
phase out time frame, ending with the year 2000 Budget.  Nigeria was already holding informal
consultations with some members on the proposed three year time schedule which, once approved by
Government, would be formally conveyed to the General Council.  He hoped that the Council would
welcome this offer in a positive manner, taking into account the peculiar circumstances of the Nigerian
economy and the need to allow time for the necessary adjustments.
11. The implementation of the Uruguay Round Agreements and Nigeria's integration into the global
economy remained major challenges.  Noting that Nigeria had encountered several difficulties in meeting
some of the contractual obligations, he expressed particular interest for developments in the WTO
Committees on Customs Valuation, Pre-shipment Inspection, Agriculture, Intellectual Property,
Trade-Related Investment Measures, Government Procur ement, Safeguards and Subsidies, as well as for
the negotiations outlined in the Geneva Ministerial Declaration, in particular the Built-in-Agenda.  He
expressed the hope that discussions on these issues would not result in increased trade barriers to products
of export interest to Nigeria.
12. In conclusion, he reiterated that the overall objective of Nigeria's trade policy since 1991 had
been to diversify the country's export base and to continue to liberalize the import regime.  As
market-oriented policies were being introduced, he looked forward to an improved economic climate in
Nigeria where a greater role would be assigned to the private sector in all areas of economic activity, and
invited all members of the WTO to come and invest in  Nigeria, a great potential market in Africa with a
population of over 110 million people.WT/TPR/M/39
Page 6
III STATEMENT BY THE FIRST DISCUSSANT
13. The first discussant (Mr. Monceef Baati) recalled that in 1991 Nigeria had been the first African
country to submit to the trade policy review exercise.  Since then, much progress had been achieved
thanks to a prudent budgetary policy which had resorbed the federal budget deficit.  GDP growth had
accelerated from 1.4% in 1994 to 3.8% in 1997, with expectations of an 8% expansion for 1998.  He
asked whether the closing of Dedicated Accounts, destin ed to finance priority government projects, might
not jeopardize the creation of infrastructure needed for industry expansion.
14. He noted that the heavy public debt constituted a potential handicap to investment in
non-traditional sectors and he asked how Nigeria intended to re-establish dialogue with external creditors
in order to address this problem.  Despite the weight of debt service, however, a US$4 billion surplus had
been recorded on the balance-of-payments in 1996.  This improvement had been concomitant with a
progressive removal of products from the import prohibition list.  He noted that the WTO committee on
balance-of-payments restrictions had called for the elimination of these remaining restrictions.  Thenotification by Nigeria of certain restrictions as  safeguards had also raised concerns among WTO
Members.  He welcomed the plan announced by th e Minister of Commerce and Tourism of Nigeria to
eliminate import prohibitions within three years, and asked whether there were any prospects for further
liberalization, for example in the context of Vision 2010.
15. The first discussant recalled that the  Nigerian economy was dependent on exports of crude oil,
which represented 95% of export earnings and 75% of  budgetary receipts.  He asked how the Nigerian
Government intended to ensure that oil price fluc tuations would not jeopardize economic growth.  While
export diversification was one obvious solutions, agriculture continued to suffer from certain handicaps
which prevented it from playing its role in the country's development. In this context, he hoped that the
recent fertilizer market liberalization would improve agricultural yields.
16. The manufacturing sector remained a serious concern, with implications in terms of economic
growth and export diversification.  He suggested that the large proportion of high tariffs and the small
share of tariff bindings may reduce Nigeria's attraction for investors.  In this context, the integration of the
informal sector, whose role for employment was cr ucial, into the mainstream of the economy could
increase tax earnings and provide a more stable basis for inter-regional trade and cooperation.  NotingNigeria's role in the ECOWAS, he called for Nigeria to reinforce its commercial links on the African
continent.
17. The implementation of the WTO Agreement was an essential step towards integrating Nigeria
into the world economy.  He stressed the need for a domestic mechanism to track the progress made in
applying the agreement, and recommended the establishment of a commission that would allow a better
coordination among administrations concerned, define the legislative changes needed to implement the
WTO Agreement and identify technical assistance needs.
18. Noting that the ambitious privatization plan would improve efficiency and constitute an attraction
for foreign investment, he asked for the timing and the sectors concerned.  This privatization would in his
view help to meet the government objective of making Nigeria a developed country by the year 2010.
He asked whether the authorities intended to establish a commission in charge of such privatizations, and
whether there were plans to adopt legislation on competition.WT/TPR/M/39
Page 7
IV STATEMENT BY THE SECOND DISCUSSANT
19. The second discussant (Ms. Florence Dobelle) welcomed the announcement by the Nigerian
delegation of a plan to eliminate import prohibitions within three years, but considered that there was a
need to both widen and broaden the import liberalizatio n process.  Stressing the need for a simplification
of import procedures involving the elimination of redundant documents, she asked whether there was a
planned schedule for the elimination of preshipment inspection.  She also asked when Nigeria intended toadopt legislation on safeguards, what steps were being taken to implement the Custom Valuation
Agreement at the end of the five-year transition period on 1 January 2000, and suggested that Nigeria
request  technical assistance to ensure its implementation.
20. She then suggested several new areas for policy liberalization, such as reducing customs duties on
inputs used by the agricultural and food  processing industry. More tariffs could advantageously be bound
at applied rates. She also asked whether Nigeria considered that joining the WTO Information
Technology Agreement could, in the long run, be possible.
21. Turning to Nigeria's export regime, she found that cumbersome export procedures constituted an
obstacle to export diversification and asked whether Nigeria envisaged their liberalization.  Noting that
commercial policy was perhaps not the means to solve financial problems, she asked for an assessment of
the Export Preshipment Inspection procedure in terms of efficiency, costs and circumvention.  Was a
reduction of the sectors subject to export prohibitions under consideration?  Which sectors could benefitfrom this opening?  She also enquired whether minimum export prices were still in place.
22. Nigeria's numerous export assistance schemes contrasted with the complex administrative export
procedures.  Noting that part of this assistance was financing activities of foreign companies, she asked
about their budgetary cost.  She suggested that inve stment-related export performance requirements, as
allowed under the TRIMS Agreement, could be an alternative to the subsidy schemes currently in place.
23. With regard to investment and infrastructural deve lopment, she stressed the need for a stable and
secure judicial framework for business to develop, as well as a sound banking and financial sector.  In
particular, investors needed to have access to adequate tribunals and processes in case of litigation, and to
be able to recover their debts.  She also stressed the need for additional measures to fight counterfeits and
piracy.WT/TPR/M/39
Page 8
V STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
24. The representative of Hong Kong, China, comm ended Nigeria for the commitment to liberalize
telecommunications and for reforms in the financial services sector, two sectors where continued
involvement of the State had in the past slowed modernization.  He also noted that the profusion of
documents required to import was not conducive to trade.  The fact that Nigeria's tariffs changed every
year reduced predictability.  He recommended that a larger share of the tariff should be bound.  He alsoasked what had happened to the landing charge on imports following the elimination of excise duties.  He
concluded by noting that his delegation had submitted several advanced questions in writing.
25. The representative of the United States regretted that Nigeria's trade policy improvements, so
evident at the last TPR in 1991, were not continued as forcefully in the first part of this decade.  It was
Nigerian firms and individuals attempting to conduct commerce and capture the gains from trade that
were most affected by extensive departures from WTO provisions.  She clarified that the United States
had banned commercial airline services to Nigeria for safety reasons.
26. These departures included the continued and expanded use of state trading, import substitution,
import and export bans and other quantitative restrictions, high tariffs, multiplying customs requirements,
and the unpredictable application of multiple trade barriers and countervailing subsidies, which had
aggravated economic problems.  These trade policies had, in many cases, been inconsistent with WTO
obligations.  They had  prevented Nigerians from benefiting from the trade expansion in the 1990s thathad benefitted so many other economies.
27. Efforts since 1995 to remedy these mistakes, such as the enactment of realistic tariffs, the
elimination of non-tariff measures, and the institution of other "investment-friendly" reforms were
welcomed and should be continued, expanded, and intensified, in order to achieve more domestic and
foreign investment.
28. Nigeria's institutional framework and current constitutional arrangements had increased the risk
of doing business there.  Transparency, accountable government, and respect for the rule of law would
greatly enhance business confidence and, consequently, investment and trade.  The medium to long-term
evolution of the Nigerian economy depended on whethe r the Government of Nigeria would deepen and
accelerated the process of structural reform, a precondition both for debt rescheduling and for privateinvestment.
29. She supported Nigeria's request for technical assistance from the WTO and from developed
countries to realign its domestic regulations with WTO requirements and to develop the human capacity
and strengthen relevant institutions which were necessary for the successful implementation of the
agreements.  She recalled that President Clinton's Partnership Initiative for Economic Growth and
Opportunity in Africa focused on collaborating with reforming African countries to help them integrate
into the world economy.
30. Noting that her delegation would appreciate written responses to each of the advanced questions
presented in writing, she considered that a rapid development of the legislation necessary to give the
WTO agreements the force of law would greatly enhance the attractiveness of Nigeria as an investment
destination.  She invited Nigeria to seek the assist ance of the relevant WTO committees in identifying
areas where new legislation was necessary.
31. Nigeria's system of applied variable tariff rebates, special tariffs, and general surcharges, was not
predictable and transparent, and placed an unnecessary burden on trade.  She called for highest tariff rates
to be brought down to commercially viable levels that provide protection and revenue withoutWT/TPR/M/39
Page 9
encouraging customs fraud and smuggling.  To the exte nt that these tariffs were intended to encourage
domestic output, she asked whether Nigeria should be diverting domestic resources to the production of
goods that require a tariff of over half their value to be competitive.  An expanded scope of Nigeria's
WTO bound tariffs would give businesses a much better sense of what to expect.
32. She joined others in calling for the removal of  quotas and licensing restrictions.  In particular,
she asked why Nigeria had justified prohibitions on millet, sorghum, wheat flour, and gypsum forsafeguard reasons even though it lacked WTO-consistent legislation on safeguards, and while substantial
quantities of these products entered the country through informal channels.
33. The use of differential exchange rates to value "official" and private sector imports was a clear
violation of GATT Article VII and the Agreement on Customs Valuation, since it did not meet the
requirement of first use of "transaction value.  The use of reference import prices was also absolutely
prohibited under WTO rules.  The preshipment inspection system caused delays in trade, was
inconsistent with the Agreement on Preshipment Insp ection, and was applied in a discriminatory manner.
She also called for faster clearance of customs.
34. Nigeria was party to most international agreements on intellectual property rights, but
enforcement of existing laws remained weak, particularly in the patent and trademark areas.  Most
companies did not bother to secure trademark or patent protection because it was generally considered
ineffective.  Nigeria was considered to be the largest market in Africa for pirated goods from thirdcountries and production and sales of pirated tapes, videos, computer software, and books remained
widespread.  In view of these problems, she asked for an outline of Nigeria's plans to make its intellectual
property regime consistent with the requirements of the TRIPS Agreement by the 1 January 2000
deadline.
35. She welcome the release of two prominent labour leaders and urged the Government to release
the others.  In 1997, Nigeria had been the subject of a "special paragraph" at the ILO International Labor
Conference due to violations of Convention of 1987 on Freedom of Association.  Noting that Nigeria had
been the subject of two previous special paragraphs, she asked whether the authorities intended to
cooperate with Commission of Inquiry under Article 26 of the ILO Constitution, and whether core labour
rights would be enforced in the newly developed export processing zones.
36. The representative of Australia noted that Nigeria's economy had suffered from persistent
political and institutional uncertainty, and emphasized that the conditions of democracy and good
governance were fundamental to economic development and economic liberalism.
37. High tariff protection was not in keeping with the objectives of the Government's Vision 2010
programme, and Nigeria should focus on those indust ries in which it could be genuinely competitive
internationally.  Since the January Budget, very littl e had been done to take forward the privatization of
the state telecommunications company (NITEL) and the power authority (NEPA).  She called for quickimplementation of the necessary legislation so that those companies could support broader economic
development.  The minerals sector was another area ripe for development.  Australian companies, with
good track records in other West African countries, had indicated their interest in Nigeria if the conditions
covering tax and ownership were improved.
38. She considered that the lack of transparency in Nigeria's import regime and its lack of
predictability had acted as  disincentives for trade, and joined calls for a more comprehensive binding of
Nigeria's tariffs.  Nigeria's continued application of quantitative restrictions was in contradiction of itsWT/TPR/M/39
Page 10
WTO undertakings, as highlighted in advanced written questions by Australia.  In conclusion, she
observed that Nigeria was at a crossroads in its economic and trade policies, and encouraged Nigeria to
act quickly in its new political environment, focusing on the announced privatization programme,
increased transparency in trade policies and compliance with WTO obligations to restore international
confidence in the economy.
39. The representative of Japan welcomed Nigeria's increased economic growth, the stability of the
exchange rate and the low level of inflation. He hoped that the trade liberalization efforts announced in
the 1998 Budget would continue, and that economic growth would rest on stable macroeconomic
conditions and a vital private sector.  He invited Nigeria to review the exclusive import rights of
state-trading enterprises and joined others in criticizing persistent quantitative restrictions on imports and
opaque customs procedures.
40. Nigeria's preshipment inspection system had been described as expensive and inefficient.
Nigerian customs frequently determined a higher rate of duty than that stated in the import duty report.His delegation had forwarded other questions in writing.  He called upon Nigeria to bind tariffs and
reduce trade barriers, whilst eliminating any discriminatory treatment.
41. The representative of Canada noted that the stability and predictability of Nigeria's institutional
framework remained major concerns, and that the current opaque constitutional arrangements and
reliance on decrees had weakened the rule of law, increased the risk of doing business in Nigeria and,thus, discouraged investment and trade.  He asked fo r clarification regarding the new Government's plans
with respect to strengthening the rule of law and the adoption of well-defined constitutional arrangements.
42. The representative of the European Union recalled that the political relations between the EU and
Nigeria were problematic with sanctions now in place, motivated by serious human rights violations.
There was  a link between political development and economic performance.  The fact that such aresource-rich country showed a disappointing economic performance could be traced to factors such as
lack of accountability, transparency and predictability regarding the institutional framework, widespread
corruption and fraud, heavy administrative procedur es, protection, over-regulation and mismanagement.
A genuine transition to democratic civilian rule and the rule of law would greatly enhance the trading
environment, as well as investment and economic development.  The EU had  welcomed declarations tothis effect by the new Head of State as well as the recent release of some of the political prisoners.
43. The fortunes created by the oil-sector remained concentrated in the hands of the very few, while
the large majority of the populati on suffered under deteri orating conditions.  Statistics from UNDP and
the World Bank indicated an increase in the number of  the absolute poor and declining social indicators.
The high number of impediments to trade and investment constituted a catalogue of explanations for the
economic and social problems at hand.
44. He shared previously expressed concerned about Nigeria's maintenance of import restrictions,
and had submitted a written question on this matter.  Moreover, the number of items actually prohibited
was  larger than the actual number of items on the prohibition list due to broad definitions.  The
Preshipment Inspection system functioned as a non-tariff barrier and in a discriminatory fashion.
Significant trade barriers also arose from onerous licensing or registration requirements applied to
petroleum products, food, beverages, tobacco, chemicals and pharmaceuticals.  Several agenciesoperating at the ports impeded trade flows, and illegal discharging levies increased the cost of imports by
tip to 45%.  In short, import restrictions distort market conditions for trade, scared off serious operators
and stimulated smuggling.WT/TPR/M/39
Page 11
45. The lack of a true market for foreign exchange, illustrated by the dual exchange system with a
preferential official rate for official transactions, constituted a major source of distortion, as oil revenues
and debt service payments were undervalued in public sector accounts.  The system also distorted price
mechanisms and favoured the maintenance of parastatal companies.  It was  a major obstacle to
resumption of multilateral credits and debt rescheduling.  Removing dual exchange rates and budgeting
government subsidies at their market value would enhance transparency of fiscal policy and strengthenpublic and investor confidence.
46. State or public monopolies dominated sectors such as mining, oil, telecommunications, railway
and air transport.  Some 1,500 public companies accounted for 30-40% of fixed capital investment and
employment, putting a heavy burden on public finances.  There was  no specific competition policy in
place to ensure market efficiency and there was  a serious lack of transparency in public procurement.
47. The domestic energy market had  been severely distorted by widespread government intervention,
including foreign investment restrictions, public monopolies and state trading.  Domestic prices were wellbelow world levels.  Refinery maintenance had been neglected, resulting fuel shortages, smuggling and
large imports of petroleum products.  Corruption at all levels, customs fraud and informal trading were
part of the daily problems.  He shared previously expressed concerns regarding intellectual property.
48. Recent efforts and measures by the Nigerian authorities, as well as the establishment of the
Vision 2010 Committee and its commendable report went towards deregulation, liberalization andprivatization.  If however the institutional framework was not radically improved and the rule of law
established, the measures ran the risk of mouldering away on a shelf, to the detriment of the Nigerian
people.  On the other hand, the EU was ready to support the Nigerian reform efforts if there was a strong
political would to remedy the problems identified.
49. The representative of Egypt commended the Government of Nigeria for the positive steps and
significant efforts taken since the first review in 1991 which reflected the sincere will of Nigeria to fulfill
its obligations as a founding and active WTO Member.  The liberalization measures had improved
economic performance, a wide range of items had been removed from the import prohibition list, tariff
reductions under a new tariff structure covering the period 1995-2001 would stimulate efficiency and
competition for domestic manufacturers.  New investment measures provided freedom and guarantees toinvest in most sectors of the economy.
50. He encouraged Nigeria to introduce more liberalization measures to gradually eliminate the
import prohibition list, encourage the efforts of ma nufacturers and diversify production and exports.  He
asked to what extent Nigeria benefitted from its membership in ECOWAS and what measures could
enhance performances under this agreement.
51. The representative of Norway drew a parallel between the statement by Nigeria that "since the
last review in 1991, the driving force of economic pol icy had been to promote greater transparency and
accountability in the economic management of the country.  The central objective of this drive was to
restore confidence in the Nigerian economy so as to stimulate both local and foreign investment", and the
observation in the Secretariat report, that "in the face of the persistent political and institutional
uncertainty, the growing international confidence in  Nigeria's economy noted in the first Trade Policy
Review of Nigeria in 1991 had ebbed".  He shared previously expressed concerns about stability andpredictability of Nigeria's institutional system, and about the current opaque constitutional arrangements
and reliance on decrees.WT/TPR/M/39
Page 12
52. He welcomed the emphasis placed by the Nigerian Government on the essential need to restore
the confidence in the country's economy, believing that there was a strong relation between economic
development, trade and a reform, and called for political reform based on internationally recognized
principles of democracy and the rule of law.  This was essential to restore confidence and create the
necessary stability and predictability which were absolutely essential to promote investment and to
improve trade relations with other WTO members.  He urged Nigeria to cooperate with the ILO with aview to observe core labour standards.
53. The representative of Switzerland noted that Nigeria was Switzerland's largest trading partner in
Africa, but that Nigeria's trade had not expanded or  diversified since 1991 despite a formidable potential.
He shared concerns about the low level of tariff bindings at particularly high levels, the frequent tariff
changes which penalized both exporters and importers, cumbersome export procedures and persistent
quantitative restrictions on imports.  He encouraged the Government to accelerate the reform process, and
noted that a rapid implementation of the WTO Agreements and full compliance with the multilateralprinciples would signal Nigeria's commitment to a rule-based market economy.
54. The representative of Pakistan appreciated recent efforts to put the Nigerian economy back onto
the right track, including the elimination of the fiscal deficit.  He expressed the wish that the new
Government would continue the commitment to reform.
55. The representative of Côte d'Ivoire noted that both countries shared the same objectives and
concerns within the ECOWAS and had cooperated for peace and for the well-being of people in the
region.  She also commended the Government for the reforms introduced since 1995.  Fertilizer trade, in
particular, had been liberalized.  She called for efforts from the international trading community to help
Nigeria access new markets, and for new investment flows to Nigeria as these were indispensable for the
country's development.  She concluded that given it's regional importance, helping Nigeria would help allECOWAS countries.
56. The representative of Morocco noted that with a market of 110 million people, and its large
hydrocarbon resources, Nigeria was a significant trading partner with whom his country wished to
develop trade.  He welcomed recent macroeconomic improvements and the elimination of restrictions on
foreign investment, but regretted that the manufacturing sector had not expanded and that Nigeriaremained dependent on exports of oil with low value added.  He also welcomed the announcement of the
introduction of the ASYCUDA system for customs management.
57. The representative of India noted the measures instituted by the Nigerian authorities since 1991 to
promote and facilitate economic and trade developmen t and administration.  As a result of Nigeria's
structural adjustment programme launched in 1986, per capita GDP and other indicators of developments
had improved considerably.  However, the benefits had not extended across all sectors and could not be
sustained over time.  Recognising this, beginning 1995, Nigeria had introduced a programme for "guidedderegulation" and private sector led growth. Nigeria's trade policy reform had encompassed both import
liberalization and export promotion.  She welcomed the announcement that the time period for phasing
out restrictions may stand reduced to three years.  Nigeria had advanced such schemes when the
prognosis on exports was not very uplifting and the economy relied on crude petroleum, both for export
receipts and for government revenues.  She thus recommended that Nigeria duly monitor its externalsector.
58. She asked whether the highest levels of duty were levied on consumer goods, with lower rates on
intermediates and capital goods, as the Nigerian Government's document advised that the new tariff
structure had reduced tariffs on consumer items relative to raw materials and intermediate and capital
goods.  She shared previously expressed concerns regarding the discriminatory nature of the PSI system.WT/TPR/M/39
Page 13
59. India commended Nigeria for recognizing the problem and instituting steps to increase
transparency and accountability in economic management.  These steps would go a long way in bolstering
confidence among domestic and foreign entities that were engaged in Nigeria.  In particular, she
welcomed the reforms at customs and at ports initiate d by the government of Nigeria in 1996 to eliminate
malpractice and to administer them rigorously and effectively.  She believed that a more directed effort at
regularization of the informal trade sector would buttress these efforts and bring forth attendant benefits.Finally, she recalled that human rights and labour-related issues were out of the purview of the WTO, and
that the Singapore Ministerial Conference had already de termined that all labour-related were to be dealt
with by the relevant international bodies.WT/TPR/M/39
Page 14
VI REPLIES BY THE REPRESENTATIVE OF NIGERIA AND ADDITIONAL 
COMMENTS
(i) Economic performance and institutional framework
60. The representative of Nigeria observed that the uneven distribution of growth in various sectors
of the economy arose from lags in the response by some of these sectors to the Economic Recovery
Programme.  Efforts were being made by the Government to ensure improvements in these sectors,particularly the manufacturing and services sectors.  The economy was to a large extent dependent on oil
revenue and it was expected that changes in prices of oil would affect the implementation of the budget.
In the last three fiscal years, budget estimates for the price of crude oil had been consistently below actual
prices, resulting in reserves exceeding US$8 billion.  Prudent access to these reserves with continued
fiscal discipline and budget adjustment would en sure effective implementation of the 1998 Budget.
61. For the first time since 1992, the rising trend of the external debt profile had been reversed with
the reduction of the debt stock from US$32.6 billion in December 1995, to US$28.1 billionin December 1996.  Government therefore continued to implement the strategies already put in place to
achieve external debt service and debt stock sustainab ility by the turn of the century.  Data reconciliation
with the various groups of creditors which began in 1996 was continued in 1997.  To date, 11 of the 14
creditor countries had been visited, representing 94% of Nigeria’s debt to this group of creditors as at
30 June 1997.  The reconciliation also revealed that Nigeria had fully paid off her indebtedness to Ireland,Sweden and Norway.  Nigeria’ s total indebtedness to the Paris Club members, updated to
31 December 1997, stood at the eq uivalent of US$18.98 billion.
62. Nigeria was aware that the existence of a system of dual exchange rates had been a source of
concern to trading partners.  The official exchange rate was used strictly for the settlement of external
debts of Federal and State Governments and transfers to Nigerian Missions abroad.  All other governmenttransactions, including those of parastatal companies, were carried out through the Autonomous Foreign
Exchange Market.
63. The Government had recently taken a number of measures to integrating the informal sector into
the mainstream of the economy, including the establishment of Peoples Banks and community banks to
provide relatively cheap credit facilities to operators in this sector who had no formal access to credit.Other programmes included the Family Economic Advancement Programme as well as the development
of border markets along Nigeria’s borders.  It was expected that the activities in these markets could be
monitored and recorded as well as minimize smuggling.  However, the Government had difficulty in
determining the structure, organization and operational modality of the informal sector; he therefore
requested extensive technical assistance into these matters.
64. The Government of Nigeria was implementing a transition programme, the critical elements of
which had been achieved.  In particular, a new Constitution would be promulgated on 1 October 1998.
Furthermore, in order to ensure consistency in the legal and institutional framework, all laws that
inhibited competition and reduced transparency were being reviewed.
65. Following the conclusion of the Uruguay Round, a National Focal Point (an Inter-Ministerial
Committee) had been established to assess the implications of the Uruguay Round Agreements on the
Nigerian economy and advice on the changes that would be required to bring domestic legislation intoconformity with WTO Agreements.  Significant gaps had already been identified in domestic legislation
on Intellectual Property, Government Procurement, Anti-Dumping, Safeguards, Customs Valuation, etc.
He requested technical assistance from the WTO and the developed countries to work on realigning its
domestic regulations, and to develop the human capacity and strengthen relevant institutions.WT/TPR/M/39
Page 15
66. Nigeria noted that its Bilateral Trade Agreements carried no preferential trade arrangements, but
in general included trade facilitation, establishment of joint commissions to monitor trading activities
between the two countries as well as provide trade and investment information.  As a founding member of
ECOWAS, Nigeria was an active participant in the regional trade liberalization scheme.  However, the
success of integration in the sub-region was hampered by the volume of informal trade among member
states and by the failure of some ECOWAS members to meet their commitments.  Nigeria had paid all itsdues up to date and, in 1997, made available US$7 million to ECOWAS to facilitate the relocation of its
headquarters from Lagos to Abuja.  Nigeria was also about the only member to had fully paid its assessed
contribution to the Compensation Fund which was established to facilitate the full implementation of the
trade liberalization scheme.
67. Technical assistance to enhance the development of ECOWAS was required to implementation
the Trade Liberalization scheme;  achieve regional harmonization of laws, tariffs, customs procedures and
documentation, standards and other technical regulations;  and to carry out studies on the integration ofthe informal sector.
68. The first discussant noted the Government's stated desire to establish a dialogue with the
international community.  He noted that the ILO c ould provide Nigeria with technical assistance in
studying the informal sector.  He also suggested that Nigeria take advantage of the tripartite
WTO/ITC/UNCTAD programme of technical assistance to effectively implement the results of theUruguay Round.
69. The representative of the European Union felt that the overall predictability of the Nigerian
regime could not be reinforced as long as laws could be changed by a decree issued by the Head of State.
(ii) Trade measures
70. The representative of Nigeria explained that customs clearance procedures had been undergoing
reforms under the customs reforms and modernization programme.  These reforms were centred on a total
implementation of the Kyoto Convention on the simplif ication and harmonization of customs procedures.
As a result, the Nigeria Customs Service had  introduced the Single Goods Declaration (SGD) for all
clearance procedures including Home Use, Transit, and Temporary Importation.  This went together with
the ASYCUDA System which had modules for all these procedures.  Documentation had been drasticallyreduced to the SGD with the attendant Goods Declaration and Customs Declaration Forms.
71. Further tariff bindings would be made in the context of future negotiations.  Tariff rates on
consumer goods were the highest but were being pr ogressively reduced, while those on raw materials and
intermediate and capital goods were being progressively raised, so as to gradually expose domestic
manufacturers to import competition as well as attract investment into raw materials and intermediate
goods production.
72. The PSI was still in place and would remain until ASYCUDA was fully implemented.  It was
expected that once ASYCUDA was in place and the facilities for container and cargo inspection
(scanning machines) were installed, customs should be able to examine all cargo and the functions of the
PSI would be eliminated.  It was hoped that with these systems, trade would be facilitated and importers
could clear their goods within 48 hours.
73. With regard to Customs Valuation, Nigeria was still using the Brussels Definition of Value
(BDV).  However since the transition period was at its tail end, Nigeria had set up a Customs ValuationWT/TPR/M/39
Page 16
Implementation Committee.  This Committee had produced a Draft Valuation Code which had been
approved by the World Customs Organization.  This dr aft code together with answers to a questionnaire
from the WTO on Valuation would be forwarded to the WTO for comments.  Nigeria had also asked for
Technical Assistance in the implementation of the Valuation Agreement from WTO.
74. The Government fully recognized its obligations under the relevant WTO Agreements.  A
proposal was being studied by Government to address comprehensively the issue of all the remainingitems on the import prohibition list, with a view to a complete phase out by the year 2000.  The final
outcome of the proposal would be fully notified to the WTO.  Nigeria had abolished import licensing,
except in very special circumstances where a prohibited item may be allowed into the country as part of
foreign direct investment contracts, in which case such an item would attract a 100% duty.
75. Nigeria did not had the institutional and regulatory capacity to investigate anti-dumping issues.
Plans were, however, underway to institute an In vestigating Authority that would handle cases of
dumping in the system.  There was no subsidy on trade, although there were incentives on exports whichwere currently under review to make them WTO consistent where applicable.  As for other subsidies, the
matter was before the Committee on Subsidies and Countervailing Measures and Nigeria would cooperate
fully with the Committee.
76. The Government of Nigeria had  no trading companies.  Import privileges did not exist in the
Nigerian economy.  With respect to the importation of petroleum products by the Nigerian NationalPetroleum Corporation, the import privilege was an em ergency measure occasioned by breakdown in the
nation’s refineries.
77. He recognized that the need for an adequate competition policy was becoming urgent.  Necessary
steps would therefore be taken to ensure that an appropriate regulatory framework was put in place.  With
regard to government procurement, there was no express policy that local goods should be bought inpreference to imported ones.  Given the current drive towards commercialization and privatization, public
procurement would become an increasingly reduced proportion of total expenditure.  Meanwhile, Nigeria
was studying the opportunity of implementing the Agreement on Government Procurement.
78. The framework for standards and other technical requirements affecting imports had been fully
described in the Secretariat report.  Nigeria was a member of the International Organization forStandardization and the CODEX Alimentarius Commission and subjected all its standards requirements
and other technical regulations to the codes, standards and guidelines of these organisations.  Nigeria had
fulfilled all its notification obligations under the TBT and SPS Agreements.
79. Nigeria was now reviewing its laws on intellectual property to make them WTO consistent.
80. Export procedures had been simplified and shorte ned and involved registration with the Nigerian
Export Promotion Council, inspection for complian ce with quality and standards by government
appointed agents and the completion of Nigeria Exports Proceeds Form  for the purpose of repatriation ofproceeds.
81. The second discussant  asked for clarifications as to the exact date proposed for the removal of
the import prohibitions, and which prohibitions were concerned.  She asked for more information on
procurement methods, on the plan to eliminate pre-shipment inspection and on the import regime for
petroleum.
82. The representative of Australia asked about the timeframe and the composition of the Committee
for Privatizations.WT/TPR/M/39
Page 17
83. The representative of Nigeria, in response, explained that the PSI scheme had been reintroduced
for all countries, pending the installation of scanners for imported merchandise and the implementation of
the ASYCUDA system, expected to take place in October 1998.  The current phase-out proposal to the
Government concerned only products prohibited for balance-of-payments purposes, to be eliminated by
1 January 2000.  However, a wider consultation was going on, and an unfinished proposal was to
eliminate all import prohibitions.  The membership of the Committee on Privatizations was drawn fromthe Bureau of Public enterprises.
(iii) Sectoral issues
84. The representative of Nigeria noted that agricultural related trade had been further liberalized as
described in the Secretariat and Government reports.  No import bans on meat and meat products existed.
The slow growth of the industrial sector had largely been occasioned by inadequacies in the
infrastructure, cost of machinery and raw materials.  The liberalization measures to enhance competition
in the provision of infrastructure covering energy, communications and foreign exchange utilisation wereexpected to improve prospects in the industrial sector.  With regard to mining and to environmental issues
relating to oil and gas production, a detailed reply had been made in Nigeria's written replies.  A
description of the recent reform of port services to address smuggling and achieve greater efficiency was
contained in the Government report.  Regarding the privatization of telecom and power services, he
referred to the answer to question 14 of the written replies.
85. The first discussant  noted the importance of trade policy in all sectors of the Nigerian economy,
and the need to improve the performance of the services sectors.  More transparency and more stability in
trade policy would help to attract investors.
86. In response to comments on the need to improve performance in the services sectors, the
representative of Nigeria pointed out that many services sectors were now open.  Banks had been
privatized, air transport deregulated and railways were being realigned.WT/TPR/M/39
Page 18
VII CONCLUDING REMARKS BY THE CHAIRPERSON
87. Over the past two days the TPRB has conducted the second review of Nigeria's trade policies and
practices.  These remarks, prepared on my own 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 will recall that the Nigerian delegation provided written replies in the
context of this meeting.
88. The discussion developed under three themes:  (i) economic performance and institutional
framework;  (ii) trade measures;  and (iii) sectoral issues.
(i) Economic performance and institutional framework
89. Members welcomed the progress made since 1995 in restoring macro-economic stability, under
an extensive programme for private sector-led growth, encompassing the liberalization of foreign
investment and a reform of the capital market.  However, they noted that development remained uneven
and social indicators were not improving.  Noting that the economy remained dependent on oil exportrevenues, members asked about future economic prospects 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.
90. Some Members stressed that the Nigerian econom y had suffered from pe rsistent political and
institutional uncertainty.  They emphasized that democracy, good governance and the rule of law werefundamental to economic development and urged the new Government to continue the reform
programme, including the transition to democratic civilian rule.  Members stressed the need for
clarification regarding the new Government's plans to adopt well-defined constitutional arrangements.
91. Participants asked how the Government intended to address the problem of foreign public debt,
which was a serious burden on the economy.  It was also noted that the use of a dual exchange rate systemdistorted public sector accounts and was an obstacle to resumption of multilateral credits and debt
rescheduling.
92. Participants urged Nigeria to pass domestic legislation implementing the WTO Agreements and,
where necessary, to seek assistance from the relevant WTO Committees to bring its legislation into
conformity.  Some members urged Nigeria to establish a consistent follow-up mechanism which wouldprovide 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 region, and what benefits it had brought to Nigeria.
93. In response, the representative of Nigeria observed 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 these problems, particularly in manufacturing and
services.  He recognized that the economy remained dependent on oil revenue, and that weak oil priceswould affect the Budget outcome.  However, foreig n exchange reserves of over US$8 billion, prudent
fiscal policies and budget adjustments would ensure the effective implementation of the 1998 Budget.
94. The 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 external debt
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 onWT/TPR/M/39
Page 19
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.
95. The representative of Nigeria stated that a new 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.
96. The representative noted that Nigeria's bilateral agreements did not include preferential trade
arrangements.  Nigeria was participating actively 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.
97. 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.
(ii) Trade measures
98. 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 increasing tariff bindings on industrial products, and closing the
gap between applied and bound rates.
99. Members noted that import procedures were cumbersome and lengthy; reference prices were still
in use;  the preshipment inspection scheme appeared 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 intended to co mply with the provisions of the WTO Customs
Valuation Agreement by the end of the transitional period.
100. 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 clarification on their WTO justification in the absence of WTO-consistent
domestic legislation on safeguard measures.
101. Members also questioned the coherence of Nigeria's export policies.  They noted that several
prohibitions continued to restrict potential export diversification while administrative export
requirements, designed primarily to ensure repatriation of export proceeds, also acted as a constraint toexport.  In contrast, a wide array of export assistance instruments remained in place.
102. Public sector companies continued to dominate large segments of the economy and trade,
accounting for 30-40% of fixed capital investment.  Participants deplored the lack of transparency in
public procurement.  While welcoming the announcement of the privatization of several public entities,WT/TPR/M/39
Page 20
including that of the telecommunications operator before the end of 1998, Members emphasized the need
for a competition policy to ensure market efficiency.
103. Some participants noted the need for improved en forcement of intellectual property rights, and
asked for the Government's plans to bring its intellect ual property legislation into conformity with the
provisions of the TRIPS Agreement.
104. 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 efficiency by reducing tariffs on consumer goods relative to
those on raw materials and intermediate products.
105. Customs clearance procedures were being reformed to implement fully the Kyoto Convention.
Preshipment inspection was being applied across-the-board without discrimination.  Documentation
requirements had been drastically reduced through the introduction of a Single Goods Declaration, which
was a first step towards implementation of the ASYCUDA scheme.  The objective was to allow importersto clear goods within 48 hours.  Nigeria had also produced a draft Customs code that was already
approved by the World Customs Organization;  this code, and answers to the WTO customs valuation
questionnaire, would be forwarded to the Secretariat for comment.
106. 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.  Inaddition, his Government was studying a proposal to address all remaining items on the Import
Prohibition List with a view to their eventual phase out.  Licensing had been abolished except for
prohibited items allowed as part of foreign investment contracts, on which a 100% duty was imposed.
107. 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 underconsideration.
108. Nigeria provided export incentives but no subsidies 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 those awarded to the national oil company as an emergency
measure following the breakdown of the country's refineries.  There was no express policy givingpreference to local goods in government procurement.
109. 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.
110. 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 competitionrules were put in place.
 (iii) Sectoral issues
111. Members raised questions on various sectoral issues, including:
- The performance of the agricultural sector, which was inhibited by certain import and
export prohibitions, despite recent liberalization of fertilizer imports and cassava exports;WT/TPR/M/39
Page 21
- Structural and environmental issues relating to oil and gas production, which represented
95% of export earnings and three-quarters of government 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 improvements through privatization and other
measures to enhance efficiency.
112. In response, the representative indicated that agricultural 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 exchange were expected to improve prospects for industry.
113. Nigeria had begun a review of the Minerals Act to encourage foreign investment in the solid
minerals sector, while the capital gains tax had already been abolished.  Nigeria recognized the adverse
environmental consequences associated with gas flaring and was providing incentives for producers to
decrease such practices.
114. Recognizing the problems associated with the operation of ports, the representative indicated that
the Government had already started a reform programme in that area.  The privatization of NITEL would
begin before end 1998, while the electricity utility NE PA was being reorganized in view of privatization.
Nigeria's shipping policy was also under review with a view to liberalization.  A number of other
activities were already open to private investment, including banking, air and road transport.
115. In conclusion, let me say that in this review, most Members have recognized the progress made
by Nigeria in macroeconomic and trade policies in recent 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.
116. 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 democratic regime – clearly signalled by the Delegation –will resolve many of the serious concerns expressed in this meeting regarding governance, stability and
predictability of policies.  I welcome Nigeria's identification of technical assistance needs, the indications
that have been given as to where such 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 consideration 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.
_______________