RESTRICTED
WORLD TRADE WT/BOP/S/6
2February 1998
ORGANIZATION(98-0355)
Committee onBalance-of-Payments Restrictions
RESUMED CONSULTATION WITH NIGERIA UNDER
ARTICLE XVIII:12(b) OFTHE GATT 1994 AND
THE RELATED UNDERSTANDING
Background Paper bytheSecretariat
1. ThisnotehasbeenpreparedasbackgroundinformationfortheresumedconsultationwithNigeria
on11-12 February 1998.
Nigeria: Budget 1998
2. TheNigerian Federal Budget waspresented inJanuary 1998asa"budget oftransition". The
underlying economic estimates for1997, aspresented bytheGovernment, aregrowth of3.8% inreal
GDP, upfrom3.3% in1996; inflation of8.5%, down from29%: aFederal budget deficit of5billion
Naira (approximately US$67 million attheend-1997 exchange rate), andexternal reserves of
US$7.7 billion (14months of1996imports), upfromUS$4.1 billion in1996. Official estimates also
show increases bothinoilrevenue, resulting from higher oilprices, andinnon-oil revenue. The
authorities notethatcustoms revenue collection, inparticular, hasimproved steadily fromN39billion
in1995 toN55billion in1996 andN63billion (outofatargeted N65billion) in1997.
3. Annual economic targets inNigeria 'sNational Rolling Plan1998-2000 include GDP growth
of6.2%; inflation of3.6% in2000, backed upbybudgetary discipline anda"restrictive monetary
stance". For1998 thedeclared objectives oftheGovernment areprice andexchange ratestability,
jobcreation andsustainable growth. Keyelements inthisprogramme include astep-by stepapproach
to"guided privatization"; economic liberalization toallow theprivate sector tocompete withthepublic
sector "inallareas oftheeconomy"; astimulative fiscal policy; incentives forsmall-scale industries
andforinvestment inthegassector; andsubsidies totheStates aimed atstimulating agricultural and
foodproduction.
4. Asfarastrade-related measures areconcerned, theGovernment states thatthefollowing have
beenorwillbedone:
- In1998, measures willbeputinplace toallow clearance ofgoods within 48hours,
These include thecomputerization oftheNigerian Customs Service witheffect from
1January 1998andtheuseoftheAsycuda database tocheck thevaluation ofimports;
a24-hour service atallports; andtheintroduction in1998 and1999 ofnewx-ray
scanning equipment, aimed atavoiding theneedforphysical verification ofallimports.
- Pre-shipment inspection istobephased out: from 1January 1998, PSIwillnotbe
required inAustralia, Bangladesh, China, Cyprus, Great Britain, Indonesia, Ireland,
Japan, Malaysia, NewZealand, Pakistan, thePhilippines, Singapore, Thailand,
./.WT/BOP/S/6
Page2
Hong Kong, China andallcountries inAfrica. Dates forphasing outofPSIfrom
other countries aretobeannounced during 1998.
- The25%import dutyrebate willremain onallgoods except thoseremoved fromimport
prohibition in1997and1998andarange ofgoods considered as"luxury" items (toilet
preparations,confectionery,beverages,wineandotheralcoholicdrinks,biscuits,sweets,
cornflakes, perfumes, haircare products, secondhand refrigerators, TVsandvideos,
andnewtelevisions, video machines andCDs).
- Tariffs have beenincreased onanumber ofitems (yarn, staple fibre, textiles and
garments; audio andvideo tapes; wheelbarrows; matches; anddyestuffs. Rates
havebeenreduced onfertilizers, juteyarn, glass shells andballpoint pens.
- Asof1January 1998, fourgroups ofproducts havebeenremoved from theimport
prohibition list,either onschedule orinadvance: live,chilled orfrozen poultry and
eggs(poultry scheduled forremoval in2000); beerandstout(1999); mineral water
(2003) andbarley andmalt(1998) (WT/BOP/N/32). Inreplacement oftheprohibitions
lifted, tariffs havebeenincreased to20%onbarley andmalt, 100% onmineral water
andbeer, and150% onpoultry andeggs.
- Sixgroups ofproducts remain subject toprohibition notified forBOP reasons:
bentonites (originally scheduled forremoval in1998); plastic goods (2000), vegetable
oils(2002); maize, barytes andkaolin (2005). (Nigeria hasnotyetnotified tothe
SafeguardsCommitteetheitemsidentifiedinWT/BOP/R/35asprohibitedforsafeguard
reasons, namely sorghum, millet, wheat flour andgypsum).
- Imports ofusedvehicles andmotorcycles arealsoauthorized, subject topayment of
theappropriate duties (upto50%). These werepreviously under import prohibition,
asisstillthecaseforusedandretreaded tyres, gaming machines andmosquito repellent
coils.
Themain itemnotincluded inthebudget, which would haveasignificant effect onthestructure of
thepublic accounts, onthecompetitive relations between private andpublic sector entities, andon
trade, istheunification oftheexchange rates(which arecurrently N22/US$1 official rateandN75/US$1
market rate).
__________