RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/247 
24 May 2011  
 
(11-2553) 
Trade Policy Review Body Original:  English 
 
  
 
   
 
TRADE POLICY REVIEW 
 
Report by 
 
NIGERIA 
 
 
 
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Nigeria is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Nigeria. Nigeria WT/TPR/G/247 
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CONTENTS 
    Page 
(1) INTRODUCTION 5 
(2) MACROECONOMIC  ENVIRONMENT 6 
 2.1 Overview of the Developments in the Economy 6 
 2.2 Performance of the Economy 6 
 2.3 Sectoral Performance 8 
  2.3.1 Agriculture 8 
  2.3.2 Oil and Gas 9 
  2.3.3 Industry 10    Manufacturing 10 
   Non-manufacturing 10 
  2.3.4 Services 11     Transport and tourism 11 
   Telecommunications 13 
   Electricity 14    Distributive trade 15 
   Financial sector 15 
(3) INSTITUTIONAL AND STRUCTURAL REFORMS 16 
 3.1 Agriculture 16 
 3.2 Oil and Gas 16 
  Deregulation 16 
  Transparency initiative 16 
  Niger Delta Amnesty Programme 17   Nigeria content law 17 
 3.3 Industry  17 
  Manufacturing sector 17   Solid minerals 18 
 3.4 Services  18 
  Financial sector reforms 18   Telecommunications 19 
  Energy sector reform 19 
  Tourism reform in Nigeria 19 
 3.5 Others  20 
  Privatisation/Commercialisation 20 
  Public procurement 20   The Investment Centre 20 
  Developments in the NAFDAC activities for promoting trade 21 
  Technical standards and products quality 21 
 WT/TPR/G/247 Trade Policy Review 
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    Page 
 
(4) TRADE POLICIES AND PRACTICES 22 
 4.1 Trade Policy/Objectives 22  4.2 Import Policy 22 
 4.3 Export Policy 23 
 4.4 Investment Policies 24  4.5 Sanitary and Phyto-sanitary (SPS) Measures 24 
 4.6 Intellectual Property Rights (IPRs) 25 
(5) TRADING ARRANGEMENTS 25 
 5.1 Bilateral Trade Arrangements (BTAs) 25 
 5.2 Preferential Trade Arrangements (RTAs) 25 
  D - 8   25 
  Global System of Trade Preferences (GSTP) 26 
  Economic Community of West African States (ECOWAS) 26 
  West Africa European Union Economic Partnership Agreement (WA-EU EPA) 26 
  African Growth and Opportunity Act (AGOA) 27 
 5.3 World Trade Organization (WTO) 27 
 5.4 Aid for Trade 28 
(6) MEDIUM-TERM OUTLOOK 29 
  Nigeria WT/TPR/G/247 
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 (1) INTRODUCTION  
1. Since the last review, there have been some significant changes in Nigeria's political and 
governance environment, including, the successful tr ansition from one civilian government to another 
in April 2007; the sickness and death of an incumbent President on the 5th May, 2010 and the 
subsequent installation of the current President Goodluck Jonathan.  Finally, in spite of these 
developments, the Government has sustained its commitment to good governance; electoral reform; 
fight against corruption; maintaining peace and deve lopment in the Niger Delta; security of life and 
properties; improvement in the socio-economic situation through improved access to electricity, water, education, health facilities and other soci al amenities; and the welfare of workers and the 
unemployed youths. 
2. During the period under review, there are a number of factors and activities which have 
shaped the economic landscape and which will be im portant in guiding future economic policy.  
These are the implementation of the first Na tional Economic Empowerment and Development 
Strategy (NEEDS) between 2003 a nd 2007 and of the Millennium De velopment Goals (MDGs); the 
introduction and implementation of the 7 point age nda at the inception of President Yar A'dua's 
administration; the preparation of the draft of NEEDS 2 and the Nigeria Vision 20: 2020 
(NV20:2020), together with the first Na tional Implementation Plan (2010-2013).  
3. The implementation of NEEDS1 ended in 2007,  and various efforts were put in place to 
produce NEEDS 2.  The new administration which took office in 2007 introduced the 7-point agenda, focusing on power and energy, food security, wealth  creation, the transport sector, land reforms, 
security and education. The issue of security especial ly in the Niger Delta attracted priority attention 
because of the spate of kidnappings of top personnel of oil companies and destruction of oil and gas 
installations and consequen tly, damage to socio-economic activities in the region. 
4. The rate of growth in Gro ss Domestic Product (GDP) averag ed 6.2% between 2005 and 2009, 
varying from 6.5% in 2005 to 6.0% in 2006, 6.4% in 2007, 6.0% in 2008 and 6.7% in 2009. The provisional estimate for the first half of th e year 2010 was an annual rate of 7.5%. 
5. The oil and gas sector has been performing belo w the average growth rate for the economy as 
a whole.  It grew at the rate of 3.3% in 2004 a nd 0.5% in 2005, then recording negative growth rates 
of -4.5% for 2006 and 2007, -6.2% for 2008 and -1.3% in 2009.  This impacted  on overall economic growth, since the growth rate of non-oil sector averaged 8.9% between 2005 and 2009, ranging from 
8.3% to the highest rate of 9.5% recorded in 2007.  
6. Thus, the growth rate in the non-oil sector is mo re stable than the experience with the oil and 
gas sector. In the non-oil sector, telecommunicati ons and postal services recorded 59.4% average 
growth rate between 2005 and 2009. Other sectors that recorded above 10% average growth rate 
include wholesale and retail trade, 13.9%; building construction and real estate, 12.1%; and health 
services, 10.2%. 
7. The structure of the Nigerian economy remain s relatively unchanged, which underlines the 
need for diversification. The dominant sector re mains agriculture, whose contribution to GDP was 
about 40% in 2008 and 2009 respectively. The declin e in the contribution of oil and gas between 2008 
and 2009 from 17.4 to 16.3% of the GDP is attri butable to hostilities in the Niger Delta, the oil 
producing area of Nigeria, and to declin e in international crude oil prices.  
8. Continuing reforms in the telecommunications sect or increased its share in GDP from 2.9% in 
2008 to 3.7% in 2009. The disappointing performance of the manufacturing sector continued, though WT/TPR/G/247 Trade Policy Review 
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 there was a marginal improvement. From 3.79% of GDP in 2005, the performance of the 
manufacturing sector improved as its share in GDP in creased to 3.91, 4.03, 4.14 and 4.17% for 2006, 
2007, 2008 and 2009 respectively. The role assigned to  this sector especially in the NV20:2020 
clearly shows that urgent measures are required to increase its share in GDP. 
9. The various efforts over the past few years, at promoting efficient management of the 
economy started paying off especially the pursuit of  fiscal prudence which manifested in reduced 
fiscal deficits from 8.4% of GDP in 1999 to 2.8% in 2003 and further to 1.1% in 2008. However, 
other macroeconomic indicators such as inflati on and youth unemployment re main a major challenge. 
Inflation was 11.6% in 2005 and declined gradually to 8.5% in 2006 and 6.6% in 2007 before 
increasing to 15.1% in 2008. Global food and ener gy crises, droughts and other natural disasters 
which resulted in the domestic scarcity of food as we ll as shortages of petrol eum products are some of 
the causes of inflation in country. Youth unempl oyment and poverty still remain very high, despite 
various interventions by the government. 
(2) MACROECONOMIC ENVIRONMENT  
2.1 Overview of the Developments in the Economy 
10. Despite the recent rates of growth in Nigeria's GDP, per capita income in Nigeria is very low 
compared to emerging developing economies such as China. Both private and government consumption increased over the review period. The gene ral rate of inflation was 11.6% in 2005, and it 
declined gradually to 8.5% in 2006 and 6.6% in 2007, before increasing to 15.1% in 2008 and 12.4% 
in 2009.  The exchange rate was relatively st able during the period 2005-2008, but depreciated 
substantially between 2008 and 200 9. Capital market capitalisation surged from N2.9 trillion in 2005 
to N5.12 trillion and N13.29 trillion in 2006 and 2 007 respectively.  It fell to N9.52 trillion and 
N7.03 trillion in 2008 and 2009, respectively partly as a result of the global economic and financial 
crisis. 
11. Following the debt relief granted Nigeria in 2006, the country's level of external indebtedness 
reduced drastically from US$20.5 billion in 2005 to less than US$4.0 billion over 2006-09 period. 
The flow of Foreign Direct Investment (FDI) remain s unstable. The ratio of FDI to GDP is abysmally 
low ranging between 2.0 and 3.5% during the review period.  
12. Foreign trade continues to play a major role  in the Nigerian economy and both export and 
import values have increased over ti me. The structure of export rema ins dominated by oil and gas. 
Non-oil items dominated the country's imports. The country recorded surpluses  in trade and current 
accounts, while capital account was in deficit. The country recorded surplus in overall balance of 
payments account which as a percentage of GDP fell from about 10.0% in 2005 to 0.81% in 2008, and 
rose again to 1.69% in 2009. The trade performance  led to accumulation of external reserves which 
reached a peak of US$70.2 billion in 2008 from US$29. 1 billion in 2005. However, it has declined to 
US$53.64 billion in 2009. Government fiscal operati ons have resulted into fiscal deficit over the 
years.  Rate of unemployment increased from 11.9% in 2006 to 14.6% in 2007 and 19.7% in 2009, 
with further increase to 21.1% in 2010. 
2.2 Performance of the Economy 
13. Output of the Nigerian economy (GDP in nominal terms) for the period between 2005 and 
2009 was N20.56 trillion compared to N5.99 trillion recorded during the last review period (1998-2004). Real GDP growth rate averaged 6.33% during 2005-2009 compared to 8.49% recorded in the 
last review period (1998-2004). The growth of the GDP is driven essentially by the growth of the non-Nigeria WT/TPR/G/247 
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 oil sector, which output growth rate  recovered from negative trend dur ing the last review period and 
rose to an average growth rate of over 8.0% dur ing the period under review. However, as in the 
previous review period, oil sector output (GDP) dec lined during this review period. Thus, output of 
the oil sector during the period 2005-2009 grew by an average rate of 2.86% compared to 4.70% 
recorded during the last review period. The declin e in output of the oil sect or was due to hostility in 
the oil producing areas (Niger-Delta) in Nigeria.  The growth performance of the non-oil sector was 
largely due to improvement in output of the agricultural, domestic trade and telecommunication sectors.  
14. The non-oil sector became more dominant as its share of GDP rose from 66.3% during the 
last review period to 80.13% during the period under review. Similarly, agriculture and distributive 
trade remained the non-oil sub-sectors major contributions to GDP during the period. A comparison over the last review period reveals that the share of  agriculture increased from 38.5 to 41.75%, that of 
domestic trade increased from 12.4 to 16.09%, wh ile the share of communication sector increased 
from 0.55 to 2.43%.  
15. Both private and government consumption increased  over the review period, with the, private 
consumption rising from N12.75 trillion in 2 005 to N21.24 trillion in 2009 and government 
consumption  from N1.82 trillion in 2005 to N3.46 tri llion in 2009. Relative to the last review period, 
it has increased from an average of N1.71 tr illion to N2.58 trillion. GDP per capita rose from 
US$1,530 in 2005 to US$1,790 and US$1,840 in 2006 and 2007 respectively. It increased further to US$1,980 in 2008 but fell significantly to US$1,118 in 2009. Compared to the last review period, it 
has not increased significantly, thus, hovering under US$2,000 during th e review period.  
16. Government fiscal operations resulted in fiscal defi cit over the years. However, the rate of the 
deficit has reduced as the ratio of fiscal defic it to GDP fell from 4.14% recorded during the last 
review to 0.67% being the annual average over revi ew period. The general price level fluctuated 
between 2005 and 2009. The rate of inflation fell from 11.6% in 2005 to 6.6% in 2007. It rose again to 15.1% in 2008 but fell to 12.4% in 2009. The rate of inflation has declined from 12.06% attained 
during 1998-2004 to 10.46% on the average during the period under review.  
17. Exchange rate was relatively stable dur ing the period 2005-2008, but depreciated 
substantially between 2008 (N118.53 to US$1) an d 2009 (N148.90 to US$1). A comparison of the 
average exchange rate reveals that, it depreciated af ter the last review period. The financial depth of 
the economy improved over the previous period, as the ratio of broad money to GDP increased from 
22.57% in 1998-2004 to about 30.0% in 2005-2009. Si milarly, capital market capitalisation surged 
from N2.9 trillion in 2005 to N5.12 trillion and N 13.29 trillion in 2006 and 2007 respectively. It fell 
to N9.52 trillion and N7.03 trillion in 2008 and 2009 r espectively. However, when compared with the 
last review period (N1.22 trillion), there was an  increase (N7.57 trillion). The declining trend of 
capitalisation during the later part of the review peri od was due to the drastic fall of equity prices and 
delisting of 64 securities. 
18. Following the debt relief granted Nigeria in 2006 , the country's level of indebtedness reduced 
drastically from about US$30.0 billion in 1998-20 04 to less than US$4.0 billion over 2006-2009 
period. This raised the level of international competitiveness of the economy and lessened the debt 
servicing burden. During the review period, the rate of investment rose from 16.42% in 2005 to 19.79% in 2006 but declined to 12.85% in 2008. However, it increased to16.06% in 2009, and the 
average rate of investment during 2005-2009 period was 15.83%, compared to 14.8% attained during 
the last review period. The unfavourable business clim ate in Nigeria has kept investment rate to be 
less than 20.0% of the GDP, which is far from wh at obtains in some emerging developing economies WT/TPR/G/247 Trade Policy Review 
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 such as China and India. Similarly, the flow of foreign direct investment (FDI) has been small and 
unstable. The ratio of FDI to GDP is abysmally low, falling from 3.41% in 2005 to 2.12% in 2008 and 
2009.  As in the last review period, average ratio of FDI to GDP was about 2.7% during this review 
period. 
19. With respect to foreign trade, export values ha ve risen over time just like the import values. 
However, the values of exports were higher than that of imports during the review period, thus, 
accounting for trade surpluses. Oil dominated to tal export, while non-oil commodities dominated 
imports. During the review period, the country reco rded surpluses in trade an d current accounts, while 
capital account reflects deficits. Trade surplus ro se from US$4.84 billion in 2005 to US$6.27 billion 
in 2008, but fell to US$3.81 billi on in 2009. Annual current account surplus exceeded US$30.0 billion 
over the review period while current account surplu s as a percentage of GDP was 15.42% in 2008 and 
13.79% in 2009. Relative to what was recorded during the last review period (4.17%), the ratio of the 
surplus to GDP increased during the current review  period (14.73%). Whereas, capital account deficit 
as a percentage of GDP, dropped from 17.42% in 2005 to 3.27% in 2008, It rose to 13.65% in 2009. This percentage increased from 5.67% during 1998- 2004 to 11.01% during the current review period. 
The country recorded surplus in the overall bala nce of payment account as against deficit in the 
previous period. The surplus as a percentage of GDP fell from about 10.0% in 2005 to 0.81% in 2008, 
but rose again to 1.69% in 2009. The impressive tr ade performance contributed to the accumulation of 
external reserves which reached a peak of US$70.2 billion in 2008 from US$29.1 billion in 2005. 
However, it declined to US$53.64 billion in 2009, a nd recorded an average under the current review 
period (US$51.54) which was higher than (US $10.50) recorded during the previous period. 
20. The rate of unemployment increased from 11.9%  in 2006 to 14.6% in  2007 and 19.7% in 
2009 and increased further to 21.1% in 2010. Unempl oyment rate was higher in rural communities 
than in the cities. 
2.3 Sectoral Performance 
2.3.1 Agriculture 
21. Agriculture remains a major engine of grow th of the Nigerian economy. The share of 
agriculture in the total output of the economy ( GDP) was over 41.0% during the period under review. 
Thus, agriculture emerged as the highest contributor to GDP under the review period. Between 2005 and 2007, real agricultural output grew by over 7.0% , but the rate of growth fell to about 6.0% in 
2009. Nonetheless, the average rate of growth of  agricultural output during the period under review 
(6.76%) was higher than what it was during the last review period, 1999-2003 (4.4%). As in the 
previous period, crop production emerges as the main  driver of the real agricultural output growth 
accounting for over 89.0% of total agricultural out put. Livestock ranks second, accounting for 6.3% 
of agricultural output, while forestry accounted for about 1.3% of total agricultural output. Crop production grew by an average rate of 2.5%, while ot her sub-sector grew by a mean of less than 0.2%.  
22. Given the dominance of oil in export, the share of agriculture in export has continued to be 
very small (average of about 0.7% over time), while its share of import is relatively large (about 
10.0%). The improved performance of the agricultura l sector during the review period has been due to 
adequate rainfall, improved pest control system and post-harvest handling, availability of high 
yielding and diseases resistant seeds/seedlings and inte nsification and application of off-farm research 
technologies. Other factors include promotion of  private sector investment in the sector and 
government policy and programmes on agricultural and rural development as well as food security. Nigeria WT/TPR/G/247 
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 23. Despite this impressive performance of the sector , a number of constraints militate against its 
potential to serve as a driver of growth and development in the count ry. These include the persistent 
drift of the population from rural to urban areas; w eak linkage to agro-industrial sector resulting in 
surpluses, wastages and low prices during harvest period; poor research coordination and weak 
linkage between research and extension; poor c onsideration of soil types in input (particularly 
technology and fertilizer) use; non competitiveness of  the agricultural export sub-sector; persistent 
problems of access to credit particularly in the ru ral areas; high cost of agricultural labour, ageing 
farming population and low return to investment which makes agriculture less attractive to young and 
able bodied men; continued reliance on rudimentary tools and cultural practices; poor state of rural 
infrastructure, especially roads, resulting in increased costs of farming operations and transportation 
of produce; low productivity; low private sector inv estment; problem of development of appropriate 
farm implement and low technology tran sfer and weak marketing structure. 
2.3.2 Oil and Gas 
24. Nigeria is the 10th largest oil producer in the wo rld with proven oil reserve of about 36 billion 
barrels while Gas reserve is about 185 Trillio n Cubic Feet (TCF). Petroleum accounts for 
approximately 90% of total foreign exchange earni ngs and about 85% of to tal revenue earnings. The 
sector recorded good performance relative to othe r sectors since democratic governance returned in 
1999. By 2009 crude oil production averaged 2.14 mbd with total productibility of about 3.0 mbd while gas production was 64.88 BCM/annum. The modest performance was achieved through appropriate fiscal incentives, unparalleled price pe rformance and initiative of the amnesty programme 
that doused militancy in the operating environment   
25. Total petroleum contribution to GDP is however low as the sector is poorly domesticated. The 
share of Petroleum to GDP in the period under re view is 24.7% placing it in the 3rd position after 
Agriculture and Commerce. The low level of dom estication in the oil and gas sector informed 
government's resolve to pursue local content expans ion as an important national policy.  Percentage 
share of petroleum to GDP however declined from about 25.7% in 2004 to 16% in 2009 against the 
backdrop of strong performance in Agric and Co mmerce sectors. Notwithstanding, government has 
the ultimate goal of achieving 70% total contribution of petroleum to GDP in the medium term. The 
veritable vehicle for getting this accomplished is th e Nigeria Content policy which has been pursued 
with vigour since 2004, culminating in the signing of the Nigeria Content Act into law by the President on 22nd April, 2010.  
26. Furthermore, government is pursuing an all-en compassing overall reform agenda which is an 
integral part of effort at fast-tracking nationa l development. Much progress has been made in 
implementing the Oil and Gas Industry Committee (OGIC) report which proposes new institutional 
structures for the sector. The Petroleum Industry Bill (P IB), is at the final stage of being passed into 
law by the National Assembly. When passed into law it will repeal or replace previous oil and gas 
Acts and legislations.  
27. The Bill appropriately delineates roles among the various institutions in the industry and is 
comprehensively crafted to engender the much touted  overall reform of the oil and gas sector. It aims 
at creating operational autonomy and transparency. Th e proposed restructuring is based on the need to 
create a vibrant industry where the private sector plays prominent role. In this guise, all funding issues 
would be resolved. It would pave way for the rem oval of all bureaucratic bottlenecks, minimize undue 
government interference and guarantee effec tiveness and result-oriented performance.  WT/TPR/G/247 Trade Policy Review 
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 28. The Gas Master Plan is an important component  of the reform progra mme. Government is not 
relenting in its effort at devel oping the Oil and Gas sector to enable the sector unleash its full 
potentials on the development of the economy. Appropriate assets, policy framework are being 
emplaced for optimum utilization and value for the vast gas resources in the domestic and 
international markets. The development of the g as sub sector in a comprehensive and integrated 
manner along its entire value chain can be used  as a launch pad to jump-start the economy. 
2.3.3 Industry 
Manufacturing 
29. The manufacturing sector grew at an average ra te of about 9.0% duri ng period under review. 
Its contribution to GDP remained less than 5%. It s share of GDP averaged 4.01percent in the last 
five years compared with the average of 4.4% during 1999-2003. Indeed, the sector's share in GDP 
increased from 3.79% in 2005 to 4.17% in 2009. As at 2008/2009, capacity utilisation rates were very 
high in some manufacturing sub-sectors including leat her products (91%), structural metal products 
(83%), soft drinks (77%), pape r products (76%), leather footwear  (75%) and saw milling (74%). The 
rates were 50-60% in most sub-sectors, but less than 50% in motor vehicles assembly; wine, spirit and 
distillers; drug and medicine; breweries beer and st out); textile; tyres and tubes; and vegetable and 
grain mill. The average capacity utilisation in the manufacturing sector during this period was 54%. 
30. The unimpressive performance of the manufactur ing sector is due to non-competitiveness of 
the sector as a result of inadequate electricity and water supplies, poor road network, use of obsolete 
equipment, high cost of funds (credit and foreign exchange) and high cost of inputs.  All these have 
hindered the improvement of industrial capacity utili sation which is an average of about 54% in the 
period under review. However, compared to the last review period, 1998-2004 (when it was around 
46.0%), the capacity utilisation has slightly impr oved. Other constraints to manufacturing activities 
include the massive influx of substandard and count erfeit goods covering virtually all manufacturing 
sectors particularly textiles, foot wear, elect ronics and electrical appliances, spare parts, 
communication equipment, cement, food and beverag es, wood and wood products as well as furniture 
and furniture products.  
31. The Standards Organisation of Nigeria is res ponsible for regulating standardisation of the 
quality of all products in Nigeria, and the Weights and Measures Department of the Federal Ministry 
of Commerce and Industry is statutorily the custodian  of primary and tertiary standards in Nigeria 
traceable to international standards. The department  is charged with the responsibility of regulating, 
monitoring, inspecting and verifying all weights, measures, weighing and measuring instruments used 
for trade in Nigeria 
Non-manufacturing 
32. Building and construction is one of the sectors of the economy that has not been able to 
contribute significantly to the GDP of Nigeria. Th e contribution of this sector to the GDP fell from 
1.88% in 1998-2004 to 1.69% in 2005-2009.  However, the rate of growth of this sector accelerated 
from about 6.0% in the last review period to 12.63 % in the current review period. The activities in 
building and construction sector has been hindered by a number of factors such as high cost of 
building and construction materials, delays in  approval of documentati on in respect of land 
acquisition and access to funds.  
33. The Solid Minerals sector of the Nigerian  economy has been neglected for a long time 
following the discovery of oil and reliance of the economy on oil as the prime mover. However, with Nigeria WT/TPR/G/247 
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 the revision of the 1946 Ordinance in 1999 and the provision of generous incentives by the 
government to attract investors and prospector s the sector is developing. Among the incentives 
provided by the government to encourage participation in the sector are tax holidays, lower import taxes, deferred royalty payments, capital allowances and exemption from payment of import duties. In 
Nigeria, coal, limestone, columbite, marble and cassiter ite are the main solid minerals currently being 
exploited. The contribution of the sector to GDP has been less than 0.5% over time. However, the rate 
of growth of this sector improved from about 7.43 % in the last review period to 11.48% during the 
current review period. Improvement in demand h as contributed to growth of the sector. A major 
challenge to the development of the sector now is th e shift in demand for coal by the major buyers of 
the products (Nigerian Railways Corporation (NRC)  and the Power Holding Company of Nigeria 
(PHCN) to the use of petroleum and gas products and low level production of cement, which led to a 
fall in demand for limestone. 
2.3.4 Services 
Transport and tourism 
34. Transportation system is a key sector in Nigeri a's socio-economic development. It is a sector 
that makes movement of persons and goods possible,  which is a basic strategic requirement for the 
growth and development of any economy. Also, it en sures the existence of inter-modal connectivity 
between sectors, cultures, production and consumpti on, which form the pivot of a people's economic 
life. The transport system in Nigeria comprises th e following modes: railways, roads, ports, inland 
waterways transport, and air.  
35. The performance of the Nigerian roads sector ha s not been satisfactory despite its enormous 
potentials for growth and development. The poor tr ansport facilities and infrastructure have severely 
constrained economic development. These myriad of challenges in the transport sector have reduced 
the levels of trade and foreign direct investment in the economy. 
36. In view of the poor state of the road network that contributed significantly to high cost of 
living and doing business in the country, govern ment has taken measures for efficient road 
maintenance and rehabilitation by establishing a Federal Road Maintenance Agency (FERMA) 
in 2002.  Further policy improvements were made in 2005 with the enactment of the Infrastructure 
Concessioning Regulatory Commission Act to better regul ate and enhance the participation of private 
sector in the financing, construction, maintenance a nd operation of infrastructure. In 2006, the Federal 
Government of Nigeria adopted the National Polic y on Rural Travel and Transport which gives 
priority to core rural roads network with private sector participation as one of its key objectives. 
Government plans to encourage public-private partne rship in the expansion of the current system to 
meet present and future needs. 
37. The lack of necessary resources to  keep tracks, rolling stocks and maintenance of facility in 
reasonable working condition resulted in a serious de terioration of the railway system. Therefore, 
Nigeria has recently embarked on a railway revita lization programme. A milestone in this programme 
was the signing of $8.3 billion agreement contract with the Chinese Government. The planned project 
of railway modernization was signed in two tranch es which include the main contract covering the 
first rail that would connect the largest commercial city in the south-west (Lagos) to the largest 
commercial city in the north (Kano)  which would be concl uded in five years by a Chinese firm and an 
Italian consultancy outfit. WT/TPR/G/247 Trade Policy Review 
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 38. The railway revitalization project is a part of  an integrated transportation system in the 
country covering land, air and maritime transport. The construction of the new standard gauge track 
north-south is only the first ph ase of a modernization programme that would cover two major 
longitudinal lines .The second would link Port-Har court and Jos and another would link all the 
36 States' capital in Nigeria. Currently, government  owns, operates, manages, funds and control the 
Nigerian railway system. This is an aberration in today's world as it does not engender efficiency and 
productivity. Government is therefore reforming the rail transport system through the introduction of 
private sector management and investment using concessioning. 
39. Air transport is the main transport mode fo r tourists, high-value e xports and imports; and 
perishable goods. The service has the potential to facilitate economic growth. Expansion and 
modernization of the aviation industry capacity is, th erefore, vital to the growth of the Nigerian 
economy. A cursory look at the Nigerian aviation indu stry suggests that some degree of liberalization 
has taken place since the collapse and final liquidati on of the national carrier-the Nigeria Airways. 
This is characterized by the entrance of a couple of  private operators. Some progress has been made in 
policy reforms, thus, in 2006;  the Federal Governme nt enacted the Civil Aviation Act with the aim of 
making the Nigerian Civil Aviation Authority autonomous with increased funding. An accident 
investigation Bureau was also created. The various reforms in the sector have improved the rating of 
Nigeria by ICAO. The country is now a category I member of ICAO. Another forward-looking decision in the aviation sub-sector was the on-going concessioning of Abuja Airport. 
40. Maritime transport offers economies of scale in the movement of goods at low cost. Nigeria 
has a total of 6 ports delineated into 26 terminals most of which have been concessioned to private 
operators. Prior to reforms Nigerian ports were ow ned and operated by the statutory body known as 
the Nigerian Ports Authority in  accordance with its enabling Act.  This system hindered port 
development and curtailed operational efficiency. Port concessioning therefore was Nigeria's response 
to the imperatives of reforming aimed at modernising the port sector concession as an option in order to increase efficiency and reduce cost  to users. Different options were examined before arriving at the 
landlord model for port operations.  The respective roles of public and private sectors were revised. 
The private sector assumed the responsibility of terminal operations, cargo handling, warehousing and 
delivery, while the Public Sector ensured concessi oning plans created reforms in three dimensions: 
structural, institutional, and operational reforms.  These private operators have contributed to the 
development of ports infrastructure in recent y ears. With the successful handing over of the 26 
terminals to private operators, government is current ly focusing on policies geared at consolidating 
gains of the reforms.  There have been some improvements in operationa l performance as shown 
below: 
Performance indicators:  2000-2010 
Year No. of vessels 
completed Cargo throughput 
(mt) Turn around time 
of vessels (days) Berth occupancy 
rate (%) Waiting time 
of vessels 
(days) 
2000             3,330        28,932,880  7.01 44.76 0.34 
2001             3,742        35,940,692  7.91 51.78 1.27 
2002             3,500        36,987,241  11.34 56.58 3.99 
2003             3,661        39,765,945  7.89 52.75 2.17 
2004             3,606        40,816,947  6.44 50.93 1.44 
2005             3,692        44,952,078  7.40 49.70 2.60 
Table (cont'd) Nigeria WT/TPR/G/247 
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 Year No. of vessels 
completed Cargo throughput 
(mt) Turn around time 
of vessels (days) Berth occupancy 
rate (%) Waiting time 
of vessels 
(days) 
2006             3,689        46,150,518  5.31 48.49 1.05 
2007             4,050        54,641,048  5.60 44.95 1.30 
2008             4,477        65,192,919  5.00 46.00 1.13 
2009               4,620        66,908,322  6.70 51.70 2.10 
2010               4,962        74,910,284  5.90 48.10 1.14 
Note: Cargo throughout excludes crude oil. 
Source: Corporate and Strategic Pl anning Division, NPA. 
41. The Inland Water Transport (IWT) in Ni geria has remained underdeveloped and 
underexploited as a mode of transport in spite of its  important role in transporting people and goods 
from the coastal areas to the hinterland. The future  looks bright for the de velopment of multi modal 
transport based on complementary inland waterways improvement. The dredging of the Lower River Niger and the construction /rehabilitation of port s and jetties along the River Niger is on-going. 
42. The private sector dominates the transport services sector although the government, which 
develops sectoral transport policies to regulate the sector, dictates the operational framework. 
Transport services contributed 2.3% to the GDP in 1999 with road transport contributing 2.0%, while 
water, air and rail transport, accounted for 1%, 0.07%  and 0.0004% respectively in 1999. By 2008, the 
share of road transport rose to 2.4% while those of  others became negligible due to the neglect they 
suffered in the hands of the government. Generally, it  can be concluded that the transport sub-sectors 
were relatively stagnant except with road transpor t that show a little improvement especially between 
2004 and 2008 with water transport performing worse. 
43. Tourism sub-sector is developing as part of go vernment effort to diversify the economy away 
from oil. Although the contribution of the hospitalit y services (hotel and restaurant) to GDP is less 
than 1.0% overtime, the industry recorded a steady growth of between 10.0 and 12.0% over the years. 
Telecommunications 
44. Information and communication technology (ICT) is the most important force driving trade. 
The implementation of the liberalisation policy in the sector has resulted in the opening up of the 
sector   to competition with private operators to co mpete with the former operator such as national and 
international long distance services and mobile services, etc. It created of a level-playing field for all 
operators easing or eliminating barriers to cross border movement of capital and equipment through  
the removal of restrictions in level of foreign equ ity participation, reduction in level of import duties 
on telecommunications equipment from 25% to 5%, simplification of procedures for importation of 
telecommunication equipment and development of re lated software, granting of pioneer status to 
qualified investors, and fiscal incentives to encourage local manufacture.  
45. As more Global System of Mobile communications (GSM) companies were issued licenses, 
the number of connected lines increased. As at  September 30, 2008 the total number of GSM 
operators providing mobile service in Nigeria was eight (8) with the five providing on the national 
scale, while the total number of active lines stood at  55,836,282. Further, the number of companies 
providing fixed line/wireless communication services in Nigeria was 29 as at 2007. Nigerian telecommunication services sub-sector is an oligopol y market, entry is restricted, there is free exit, 
expatriate are given quota and required National Communications Commission (NCC) registration  WT/TPR/G/247 Trade Policy Review 
Page 14 
 
 
 46. Telecommunication output grew from 30.5% in 2005 to 34.6% in 2006 and remains at the 
same level till 2009. The share of the sub-sector in  GDP rose from 1.45% in 2005 to 3.66%  in 2009. 
Since liberalization, the performance of the comm unication sector has been improving consistently 
especially from 2002 to 2009, driven mainly by th e Global System of Mobile Communication (GSM). 
Foreign investment in the sector increased from US$7,500 million in 2005 to $11,500 in 2007, 
indicating an increase of 41.1 per cent. The number of operating internet service providers (ISPS) was 
117 in 2008. As at 2005, the sector had 1,223,000 connected fixed lines which rose to 2,449,000 lines 
in 2007, while the mobile lines increase from 18.59 million in 2005 to 73.1 million in 2009 with a 
teledensity (telephone lines availability) whic h rose from 16.27 in 2005 to 53.23 lines per 
100 inhabitants in 2009. This was significantly ab ove the International Telecommunication Union 
(ITU) minimum standard of 1:100. 
47. The major constraints to good information and communications technology (ICT) sector are: 
inadequacy of science and technology infrastructure including science and technology manpower, engineering services, materials, instruments and a pparatus for training scientists and technologists in 
telecommunications. It also includes limited disse mination and utilization of research results in 
telecommunications practice in Nigeria and the use of obsolete switching and transmission equipment. 
Other constraints are lack of co-ordination and proper planning in projects implementation, poor 
energy supply leads to high cost of operation which translated to high price of the telecommunication services in Nigeria and Cable and facility vandalisation. 
Electricity 
48. Electricity sub-sector is very critical to the socio-economy development because of its strong 
linkages to all the sectors of the economy. Despite the importance of the energy sector, particularly 
the electricity sub-sector to the development of a nation, the performance of the sector in Nigeria has 
been below expectation even with the various reforms which is aimed at reducing the monopoly 
power of the National Electric Power Authority (NEPA) in the different areas of electricity generation, transmission and distribution (which le d to the formation of the Power holding company 
Nigeria (PHCN). Overwhel ming proportion of the total electric pow er is being generated, transmitted 
and distributed by NEPA, while an insignificant pro portion is being generated by the private sector.  
49. Electricity generation declined from 4,200 mw in 2003 to 1,953.9 mw in 2008 but rose to 
2,900 in 2009.  This implies that electricity genera ted fell by over 100.0% within 6 years.  With the 
installed capacity of 8,469.5 mw and 7,150 mw in 2008 and 2009, electricity utilisation was very low 
(31.57%) during the period under review.  Also, the share of electricity sub-sector in GDP has been 
very low. It stood at between 3.0 and 3.5% duri ng the review period (2005-2009). The sub-sector 
witnessed falling rate of growth and performance as a result of a number of factors such as deteriorating equipment for genera ting, transmitting and distributing electric power. Other constraints 
include vandalisation and theft of PHCN equipment and materials as well as gas pipelines, crisis in 
the oil producing areas which led to non-availab ility or inadequate gas supply for electricity 
generations and over use of the equipment. The undesirable performance of the sector led to the 
promotion of participation of private sector and ot her levels of government in the sector. Thus, the 
electricity reform Act was passed in 2005 to u nbundle the activities of NEPA so as to promote 
efficiency in the sub-sector. Recently, in 2010, the federal government in collaboration with the state 
governments made a huge investment in the sector in order to expand capacity to meet the demand of 
the economy. The unimpressive performance of the electricity sub-sector has led to a search for 
alternative sources such as sola r and energy storage devices. Nigeria WT/TPR/G/247 
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 Distributive trade 
50. One of the fastest growing sectors of the Nigerian economy is the distributive trade sector 
consisting of wholesale and retail trade sub-sectors. The output of this sector  rose by 13.51% in 2005 
and increased further by over 15.0% in 2006 and 2007 respectively. The rate of growth of the output 
of the sector fell to 11.48% in 2009. Thus, the out put of the sector grew by an annual average of 
13.89% during the period under review. Among the f actors responsible for improved performance of 
the sector are improvement in the telecommunication services, upward trend in wages and salaries, influx of cheap commodities (from the Asian countries particularly China and India) and relative improvement in transportation services. A number of constraints need to be addressed with respect to 
distributive trade in Nigeria. These include poor tr ade facilitation (inadequate access to credit facility 
and insurance services).  
Financial sector  
51. The financial sector in Nigeria witnessed a num ber of reforms during  2005-2009 period. In 
2004 (which was a pre-consolidation period), the nu mber of banks was 89 with 3,492 branches. The 
post-consolidation period that i nvolved both merger and acquisiti on of some banks reduced the 
number of banks to 25, with 3004 branches in 2006.  By 2007, the number of banks was 24, with 
3807 branches. 
52. As at 2008, government shareholdings in banks  had reduced substantially to as low as below 
1.0%, except for Unity Bank Plc, where it was as high as 68.7% . Sixteen (16) of the twenty-four (24) 
insured banks had foreign ownership with only four having a substantial proportion of foreign 
ownership. These are Standard Chartered Bank Ltd. (100%), Nigeria International Bank Ltd. (81.9%), 
Ecobank Nigeria Plc. (71.3%) and Stanbic-IBTC Bank Plc (50.1%).  With respect to private ownership of banks in Nigeria, almost all the bank s had private ownership in 2008 and 2009. Four of 
the banks had full (100%) private ownership in 20 08, including Standard Chartered Bank with 100% 
foreign private ownership. 
53. Interest rate spread has declined over time, from 14.99% in 2004 to 13.39% in 2007. The ratio 
of money supply to GDP was 19.3% in 2005 and ri sing to about 25% in 2007 showing that .The 
economy has been weak in terms of financial ability . Credit to the private sector as percentage of 
GDP (measuring the contribution of banks to private investment in terms of financing) has been fluctuating in Nigeria over time. It recorded an  upward trend from 2006 when it was about 21.7% to 
25% in 2007. Shareholders' funds in the banki ng industry increased from N1.712 trillion in 
December 2007 to N2.789 trillion as at end of December 2008.  
54. The banking industry's average liquidity ratio declined sharply from 64.83% in 2007 to 
44.17% in 2008. Out of the 24 banks in the banking industry as at the end of 2008, 21 were rated sound and/or satisfactory, 2 were rated to be ma rginal and 1 was rated unsound as in the preceding 
year. The market share of assets, credits and deposits of the unsound bank accounted for 0.84%, 
1.64% and 1.40% of the industrial total respectively.  The total market share of assets, credits and 
deposits of the two marginal banks were 3.3%, 3.75% and 3.96% of the industrial total respectively. 
Three banks (marginally sound and unsound) accounted for less than 5% of industrial total; therefore 
this posed no significant threat to the financial s oundness of the industry. The financial sector reform 
also covered the microfinance and insurance sub- sectors. These financial sub-sectors were also 
required to recapitalise. The community banks were transformed into microfinance banks. WT/TPR/G/247 Trade Policy Review 
Page 16 
 
 
 55. In nominal terms, the output of the financial sector increased from N130.75 billion in 2005 to 
N392.04 billion and N444.23 billion in 2008 and 2009 r espectively. The sector grew by 2.9% in 2005 
and between 4.0 and 5.0% in the subsequent year s.  The share of the sector in GDP hovered around 
4.0% during the period. 
(3) INSTITUTIONAL AND STRUCTURAL REFORMS  
3.1 Agriculture 
56. A number of programmes have been adopted to  improve agriculture a nd rural development, 
the programmes include: Special Programme for Food Security (SPFS), the Fadama II and III 
Programmes, the Fertilizer Revolving Fund (FRF ), the Presidential Initiatives on Cassava, Rice, 
Vegetable Oil etc. Another, important development in  the agricultural sector is recapitalisation of the 
Nigerian Agricultural Bank (NAB). Other recently completed policies and programmes in the sector 
are Added Value Exemption for locally produced ag ricultural inputs such as  fertilizer and simple 
fabricated machines. The CBN al so adopted new strategies on credit delivery, the Trust Fund Model 
(TFM) which reduced the risk faced by banks in  agricultural lending with adequate emphasis on 
production, processing and marketing.  
3.2 Oil and Gas 
Deregulation 
57. A major controversy continues to rage in Nigeria concerning the issue of the proposal by 
government to deregulate the market for the supply of premium motor spirit (PMS), otherwise known 
as petrol and Dual purpose kerosene (DPK), in  the country. The government's deregulation 
programme is premised on the assumption that in freeing the PMS market fro m its current quantity 
and pricing restraints, the market forces of suppl y and demand would invariably operate to regulate 
the delivered quantity and price which would prevail in the domestic consumer market. It is estimated 
that the projection for the level of subsidy commitments, which the government committed to 
underwrite fiscal 2009, amounted to N675 billion or roughly about a quarter of the entire national 
budget for the year. The sum of N675 billion recovera ble by way of subsidy cost savings from the 
proposed deregulation of the petroleum products can be put into social security and welfare if 
properly utilized in the development of infrastruct ure and facilities which would benefit Nigerians.  
Transparency initiative 
58. Nigeria Extractive Industries Transparency Initiative (NEITI) Act, 2007 provides for the 
establishment of the Nigeria Extractive Industries Transparency Initiative (NEITI) charged with the 
responsibility, among other things, for the develo pment of a framework for transparency and 
accountability in the reporting and disclosure by all ex tractive industry companies of revenue due to 
or paid to the Federal Government. The board and management of the NEITI had met all the 
conditions identified for the country during EITI Board's meeting in Tanzania October, 2010. The 
body expressed satisfaction with Nigeria's comm itment to openness and transparency in the 
management of revenues from the oil, gas, and solid  mineral sectors through its support to the work of 
NEITI and its audit processes. The EITI Internationa l board expressed satisfaction with the content of 
the recent audit report by NEITI, which cove rs the period, 2006-200 8, and called for the 
implementation of the recommendations contained in th at report. The challenge for the country is to 
ensure that the established high standards are mainta ined and sustained in NEITI's interface with oil 
and solid mineral sectors, particularly in the disch arge of its mandates under the NEITI Act of 2007.   Nigeria WT/TPR/G/247 
 Page 17 
 
 
 Niger Delta Amnesty Programme 
59. The Niger Delta community in Nigeria has been  agitating for the creation of more states; 
provision of infrastructures and institutions; availab ility of basic needs; fair distribution of revenues 
and an eventual control of their resources; the ec onomic ownership of oil we lls; socially responsible 
behaviour by the oil companies; respect for their eco logy; the restructuring of the federal system of 
government; and the need to convene a Sovereign National Conference to address age-old questions. 
The agitation of the Niger Delta people came to a p eak in 2009, when the President laid out a 60-day 
amnesty programme for militants in the Niger Delta. Under the deal, all militants who laid down their 
weapons during a 60-day period would not be prosecute d. The offer extended to those currently being 
prosecuted for militant-related activities; and most of them accepted the offer and renounced armed 
struggle. Part of the amnesty programme, was the or ganization of training, workshops and scholarship 
for those that renounced militancy.  
Nigeria content law 
60. Hitherto, the indigenous firms in Nigeria were  not benefitting sufficiently from the oil wealth, 
as almost 90% of the contracts for goods and services in the sector were provided by foreign firms. 
The estimated cumulative worth of the total busin esses in the oil and gas sector is about $18 billion 
US Dollars (N2.7 trillion). The government wants to achieve 45% success in 2009 and 70% in 2010, 
in respect of its local content drive in the oil and gas sector but recorded only 39% success in 2009 
and almost the same in 2010. This  lack of success was due to the absence of the enabling legislation 
and inadequate monitoring and s upervision capacity by the Nigerian National Petroleum Corporation 
(NNPC). 
61. The Nigerian Content Act (2010) was signed into law by the government in 2011. While 
many indigenous operators rejoiced over the legislation due to the exp ected benefits they perceived it 
will accrue to them, it poses a challenge to the opera tions of the International Oil Companies that may 
need to reposition their operations in line with the new law. The Act entitled "An Act to provide for 
the development of Nigerian Content in the Ni geria Oil and Gas Industry" introduces new policies 
and legislations that seem to change the shape of oil and gas business in Nigeria. 
62. According to the Nigerian Content Act, Nigeri ans independent operator s shall be given first 
consideration in the award of o il blocks, oil filed licenses, oil lif ting licenses and in all projects for 
which contract is to be awarded in the Nigerian oil and gas industry. In the bidding for any license, 
permit or interest and before carrying out any project in the Nigerian oil and gas industry, an operator 
shall submit a Nigerian content ('Plan') to the board demonstrating compliance with the Nigerian 
Content Act. Finally, the award of contract shall not  be based solely on the principle of the lowest 
bidder; where a Nigerian indigenous company has capac ity to execute such job, the company shall not 
be disqualified exclusively on the basis that it is not the lowest financial bidder, provided the value 
does not exceed the lowest bid price by 10%. 
3.3 Industry  Manufacturing sector 
63. Given that the manufacturing sector in Nigeri a is currently operating far below installed 
capacity; the Federal Government initiated measures to  revive the sector. For instance the sum of 
N100 billion (''Textile Revival Fund'') has been approve d by the government as a loan to be accessed 
by textile manufacturing firms across the country at a single digit interest rate. This is aimed at 
invigorating the textile sub-sector. The Federal Gove rnment has also approved a two to three-year WT/TPR/G/247 Trade Policy Review 
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 duty free period for the cement sub-sector with respect to the importation of machinery, equipment 
and spare parts to cover the cement plant building phase in the first two years of commencement of 
cement production. Also, the government has remove d all forms of restriction on the importation of 
gypsum and approved a maximum of five per cent duty on gypsum until the attainment of local 
production on commercial basis. 
64. The new National Sugar Master Plan (NSMP) has been prepared and approved by the 
National Council on Commerce and Industry. The NSMP defines the road map for the attainment of 
70% local content in sugar production by 2020. The NSMP also outlines programmes/projects and 
fiscal measures that will drive the sugar industry towards the 70% local content accordingly.  In 
addition, the National Sugar Development Council (N SDC), with the backing of the Ministry, has 
flagged off the delivery of input loans and credits  to 40 members of out-gro wers associations. The 
NSDC is also funding research institutes and uni versities to carry out research and development on 
sugarcane.  
Solid minerals 
65. In an effort to develop Nigeria's solid mine rals sector, the Federa l Government has made 
plans to ensure that Development Banks extend cred it facilities to operators in the industry. The plan 
will be implemented through the ''Sustainable Deve lopment Fund'' for the mining sector that will be 
created to help cushion the effect of expansion and financing burden on the operators. The fund which 
is a joint project between the government and ba nks will enable the banks to lend to potential 
investors for a longer period of time in order to assi st the miners to genera te enough revenue and be 
self-reliant. In August 2010, the Federal Governme nt granted exploration licenses to 18 firms to 
enable them begin exploration activities in the solid  mineral fields. The Ministry of Mines and Steel 
Development has decided to develop seven strategic solid minerals out of a total of about 34 solid 
mineral resources in the country because of their eco nomic importance.  The seven strategic minerals 
that are expected to generate about 85 per cent of the solid minerals sector's contribution to the GDP 
are gold, bitumen, coal, barites, iron-ore, limestone and lead/zinc. Also, a committee had been set up 
in the ministry to look into the challenges of developing each of the seven strategic minerals. 
3.4 Services 
Financial sector reforms 
66. The National Insurance Commission (NAICOM) embarked on recapitalisation of the 
insurance companies in September 2005 and compelled most companies to go to the stock market or 
merge with others in order to be able to incr ease their capital base and meet with the requirement 
before the deadline for recapitalisation by Februa ry 28, 2007. NAICOM had directed that, life, 
general and reinsurance companies that planned to  continue in business to increase their minimum 
capital base from N150 million, N200 million and N 350 million to N2 billion, N3 billion and 
N10 billion respectively. By mid-November 2007, 49 insurance and reinsurance companies were 
reported to have successfully recapitalised. 
67. The CBN's efforts at reforming the financial sector included transformation of the 
Community banks to Microfinance banks (MFBs) by increasing the minimum capital base of the community banks from N2 million to N20 million by December 31, 2007. A total of 600 Community banks met the conditions for conversion to microfinan ce banks at the expiration of the deadline. Also, 
those that were able to raise up to N1bn capital would be permitted to operate as state MFBs with 
branch network spread within a particular state. Further assessment of the state of commercial banks Nigeria WT/TPR/G/247 
 Page 19 
 
 
 was carried out by CBN governor in 2009 and 8 ba nks were found unhealthy. The situations of the 
banks lead to the injection of N 620 billion bailout .  Some of the affected banks are: Bank PHB, 
Union Bank, Afribank, Oceanic Bank, Spring Bank, Intercontinental Bank and Fin bank. In a bid to 
sanitise the industry, the apex bank had in 2009 introduced a number of reform measures including 
the removal of the executive management of eight banks.  
68. In 2010, the CBN set in motion the floating of the Asset Management Corporation of Nigeria 
(AMCON) to deal with banks' huge bad debts. At the end of December 2010, AMCON had acquired 
banks' assets worth N1.036 trillion at a discounted figure of N770 billion. Central Bank of Nigeria 
(CBN) has again indicated that the banking industry will experience the merger of 10 banks very 
soon. Following the financial sector reform, the de posit money bank reduced to 24, while the number 
of Discount houses is 5. The microfinance bank in creased to 866, while the number of finance 
companies and primary mortgage institutions are 101. The number of bureau De change is 2000, 
while there are 5 Development banks. All banks in Ni geria must be incorporated in the country and 
the same minimum capital requirements and pruden tial regulations apply to  all banks in Nigeria 
irrespective of whether they are local or foreign. 
Telecommunications 
69. Development in the sub-sector during the peri od under review included the emergence of the 
Code Division Multiple Access (CDMA) which refers  to any of several protocols used in second-
generation (2G) and third-generation (3G) wirel ess communications. The total number of mobile 
CDMA in 2007 stood at 424,579. This number is part  of the total mobile lines in the system. From a 
subscriber base of less than half a million in 2000,  Nigeria now has a total of over 89 million mobile 
and fixed connections, which is a teledensity of above 50 lines per 100 inhabitants. Investment in 
telecommunications has increased significantly to about USD 18 billion. Nigeria launched a 
communication satellite called NIGCOMSAT-1 thr ough a long march 3-B rocket in August, 2007. 
NIGCOMSAT-1 which is a super-hybrid geo-stationary  satellite, is reputed to be the first commercial 
satellite in Africa. It is expected to offer broa dband internet services to the African continent.  
Energy sector reform 
70. Electricity industry reform involves policy, t echnical, organisational, institutional, market 
design, and regulatory issues that contend within th e electricity industry, which make implementation 
of the reform a daunting challenge. It requires clear, unambiguous focus on issues to be addressed, 
which usually form the impetus for change.  The Bureau of Public Enterprises is the government 
agency saddled with the responsibility of spear heading and coordinating the reform process. 
71. The Energy Power Sector Reform (EPSR) Act established a sector regulator, the Nigerian 
Electricity Regulatory Commission (NERC) for the electricity industry.  NERC was officially inaugurated on October 31, 2005 and has begun putting structures in place. NERC's key functions 
include licensing, and implementing effective ec onomic and technical regulation. The Federal 
Government is proposing 10 to 15 years free tax period for large-scale investments in the nation's 
power sector. 
Tourism reform in Nigeria 
72. The Nigerian Tourism Development Corpora tion (NTDC) is currently developing three 
tourist sites in the Federal Capital Territory, Os un and Ekiti states to boost sustainable tourism and 
eradicate poverty in line with the objectives of th e tourism ministry and the United Nations World 
Tourism Organisation. The Federal Ministry of  Tourism and Nigerian Tourism Development WT/TPR/G/247 Trade Policy Review 
Page 20 
 
 
 Corporation set up a committee of experts in the ac ademics as well as airline, tourism and media 
industries to raise a shortlist of sites and events that will serve as the seven landmarks that every 
tourist to Nigeria and all Nigerians should see as a way of raising national consciousness about the 
beauty of the Nigerian environment. 
73. The Nigerian Tourism Development Corpora tion has begun the registration of hotels and 
tourist enterprises in the country. The exercise was necessary if the tourism sector of the economy is 
to experience the expected growth as the require d data is for planning purposes as well as to assist 
tourists in booking and gaining access to hotels.  
3.5 Others 
Privatisation/Commercialisation 74. Since the democratic administration began in 1999, the pace of privatisation has increased. 
Most of the privatisation exercise that occurred during the initial period were commercial operations 
which were easily disposed of and enterprises whic h had already had some of their shares floated.  
75. In 2009, the sale of Port-Harcourt Refi ning Company (PHRC), Kaduna Refining and 
Petrochemical Company (KRPC) and Egbin Therma l Power Station was reversed, because of the 
perceived irregularities in the processes leading to ownership transfer. Following the successful 
bargaining, the Federal Government, on Decem ber 2009 handed over Skypower Aviation Handling 
Company to Skyway Aviation Limited. The federal government had earned a total sum of N1 trillion from privatisation exercise as at 2009. The government has been trying to involve the private sector in 
the generation and distribution of electricity with a view to making the desired impact by 
complementing the efforts of the Power Holding Company of Nigeria (PHCN). The government has 
charged the National Council on Privatisation w ith the responsibility of completing the ongoing 
privatisation of government establishments. There is  a government policy on the issuance of licences 
to private investors on the establishment of private refineries in Nigeria.   
Public procurement 
76. Although Nigeria is not a signatory to the WTO government procurement agreement, the 
country has established an elaborate government proc urement policy and law. It has established a due 
process mechanism for public procurement which is a framework for tackling corruption, promoting 
transparency and accountability in the Nigeria polity . The public procurement Act was enacted in 
2007. This act led to the establishment of a Natio nal Council on Public Procurement (NCPP) and 
Bureau of Public Procurement (BPP). The objectiv es of the Bureau are to: (a) harmonize existing 
government policies and practices on public proc urement and ensuring probity, accountability and 
transparency in the procurement process; (b) establish pricing standards and benchmarks; (c) ensure 
the application of fair, competitive, transparen t value-for money standards and practices for the 
procurement and disposal of public assets and ser vices; and (d) strive towards attainment of 
transparency, competitiveness, cost effectiv eness and professionalism in the public sector 
procurement system.  
The Investment Centre 
77. In an effort to create enabling environment to facilitate and fast track trade, Federal 
government set up a One Stop investment Centre (OSIC) at the Nigerian Investment Promotion Commission (NIPC) in 2006. OSIC serves as fast  track approval mechanism and a strategy for 
facilitating and promoting investment. The main aim of the OSIC is to remove administrative Nigeria WT/TPR/G/247 
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 bottlenecks experienced by investors in the cour se of business entry and doing business in Nigeria. 
OSIC is composed of many relevant government  ministries, agencies, and departments and the 
organised private sector (OPS). 
Developments in the NAFDAC activities for promoting trade 
78. In order to meet up with the standard and cer tification set by the World Health Organisation 
(WHO), the National Food and Drug Administra tion and Control (NAFDAC) has upgraded its 
laboratory. This new development is expected to promote; (a) harmonisation of operations in Africa 
sub-region; (b) trade facilitation; (c) checking of  counterfeiting of drugs and food substances; and 
(d) enhance overall efficiency of NAFDAC and delivery of services. NAFDAC has created a desk at 
OSIC (NAFDAC desk) which carries out activities that focuses on investments promotion and trade 
facilitation of food, pharmaceuticals and other regulated  products. It also has an export desk at Port 
inspection in Lagos, which serves as contact point  for all intended exporte rs of products and food 
commodities regulated by NAFDAC. NAFDAC also h as a division at border posts, where patrol 
teams are deployed to check infiltration of fake drugs and food substances via the land borders. For 
effective operations, NAFDAC has coll aborated with many foreign countries and organisations so as 
to engage consultants/analysts with  certified laboratories such as in India, China and Egypt in order to 
facilitate. The objective of this is to analyse, at th e country of export, regulated products before they 
are imported into the country. There is also th e E-clearance initiative of NAFDAC with the Nigeria 
Integrated Customs Information System (NICIS). With this initiative, NAFDAC has privilege to 
receive SMS alert notifications for consignm ents of imported regulated products.     
Technical standards and products quality 
79. In an effort to protect Nigerian Consumers from unsafe and or substandard finished products 
the Standards Organisation of Nigeria off-shore conformity assessment programme (SONCAP) was 
introduced by government through the Standard Orga nisation of Nigeria (SON). This programme was 
designed to ensure that products meet the specificatio ns of acceptable standards and become easier to 
regulate by Agencies charged with such responsib ilities. The programme scope covers among others; 
(a) verification of product compliance; (b) assuran ce that regulated products conform to Nigeria's 
specifications; (c) Industrial Standard or other a pproved International Standards; (d) assurance of 
review process which covers accr editation of laboratory used; scope of test performed, and validity as 
well as authenticity of test report. In 2008,  SONCAP programme achieved the Issuance of 
89,069 SONCAP Certificates and 45,498 Product Cer tificates. Two additional experienced Service 
Providers SGS and TUV have been brought on-board  the SONCAP Scheme to widen the coverage 
worldwide and give stakeholders improved and mo re efficient services.  To ensure greater 
transparency in the implementation of the progra mme, SON introduced an On line Security Screening 
system (OSS) to monitor the issuance of the Produc ts and SONCAP Certificates worldwide as well as 
generate accurate data relating to importation of goods to Nigeria.  In order to improve the quality of 
Industrial goods export to the coun try, government (through the SON) initiated an agreement on 
surveillance, inspection and certification of all indu strial goods export from China. This surveillance, 
inspection and certification activity is to be undert aken by the General Administration of Quality 
Supervision and Quarantine (AQSIQ) of the People's Re public of China. The agreement is expected to 
be finalized and signed very soon. 
80. Different standards have been set by SON for a number of products including chemical, civil 
engineering, electrical engineering, mechanical  engineering, processed food items, medical and 
textiles. The guidelines for product quality inspec tion and provisional release of imports within 
48 hours have been released by SON.  Presently th e organisation has four principal laboratories. All WT/TPR/G/247 Trade Policy Review 
Page 22 
 
 
 aspects of the laboratory services conform to the re quirements of International standard, (ISO17025) 
and laboratory manual  
81. Besides the Standard Organisation of Nigeria,  the Federal Produce Inspection Service has the 
mandate for inspection and quality control of all ag ricultural produce to ensu re compliance with the 
internationally prescribed grades and standards as pr econditions for export or processing; pest control 
of produce through preshipment fumigation or prior to processing at the agro processing mills; 
spraying and disinfestations of produce stores, ship holds, hatches and containe rs in order to control 
pest in stored produce. 
(4) TRADE POLICIES AND PRACTICES  
4.1 Trade Policy/Objectives 82. The goal of Nigeria's trade policy is to prom ote the development of a private sector-led 
growth of the economy and to encourage productio n and distribution of goods and services for both 
the domestic and international markets with a vi ew to achieving accelerat ed economic growth and 
development. The objectives of Nigeria trade policy ha ve endured overtime as most of them stated in 
the Trade Policy of Nigeria (TPN) published in 200 2 still feature in the NV20:2020. The need to 
diversify, drive and promote increased value additi on in the various sectors of the Nigerian economy 
especially where the country has comparative advant age; and tariff reform with the aim of reducing 
the unpredictability, uncertainty and lack of transpar ency of Nigeria's tariff regime are some of the 
enduring objectives of Nigeria trade policy. Efforts at reviewing the current trade policy in order to make it more realistic and action- oriented have produced different versions of TPN with the last 
version produced in 2009 awaiting final adoption. 
83. The Federal Ministry of Commerce and that of In dustry were merged into Federal Ministry of 
Commerce and Industry (FMC&I) in 2007. Thus, FMC&I become responsible for formulating, 
implementing and coordinating Nige ria's trade and industrial policy. The Ministry, as far as trade 
issues are concerned, remains a clearing house as re levant sector-based Ministries, Department and 
Agencies (MDAs) of the government provide critical inputs necessary for the discharge of FMC&I 
mandate. Thus, the process of formulating, implem enting and coordinating trade policy in Nigeria 
involve extensive consultations not only among the MDAs but also with the organised private sector 
(OPS), Non-Governmental Organisations (NGOs)  including the academia. During the period under 
review, the National Focal Point (NFP) on trad e was not only enlarged to accommodate more 
stakeholders' interests, a technical committee of  the Enlarged National Focal Point (ENFP) was 
created to provide technical backst opping for informed decision-making. 
84. As a Federal system of governance, the need  to ensure cooperation, coordination and 
coherence necessitated the establishment of the Na tional Council on Commerce and industry which is 
made up of all Ministries responsible for Trade, Commerce and Industry at both the Federal and State 
levels.  
4.2 Import Policy 
85. Nigeria is committed to progressively liberalise the import regime with a view to promoting 
efficiency and international competitiveness of dom estic industries and removing with undesirable 
protection. In particular, the country is committe d to the elimination of quantitative restrictions. 
However, the need to safeguard genuine interests of  domestic industries against unfair trade practices, 
to protect the society from social (health) and moral hazards, to protect plant and animal life and the 
physical environment necessitates the use of quant itative restrictions simply because of lack of Nigeria WT/TPR/G/247 
 Page 23 
 
 
 institutional and technical capacities for acceptable alte rnative trade policy instrument(s).  As soon as 
these capacities are fully developed, the remaining rest rictions in this category would be eliminated. 
86. Developments since the last TPR in 2005 c onfirmed the Federal Government's commitment 
to the gradual approach to elimination of quantitativ e restrictions and liberalisation of tariff, There 
was a significant reduction in the maximum applicab le tariffs during the period under review when 
the maximum tariff rate was reduced from 150% (i n 2005) to 35% (in 2010) translating to a 76.67% 
reduction in the maximum tariff rate. In addition, there was an equally significant reduction in the 
number of tariff bands from 19 to 5. The five bands are 0, 5, 10, 20 and 35% with positive 
implications for the efficiency of customs administrati on. This effort translates to a tariff liberalisation 
from a simple average applied rate of 28.6% in 20 03 to 11.5% in 2010 or 59.8% cut in the applied 
tariff. The current average tariff rate is below the average for developing countries. 
87. The second bold step relates to import prohibiti on where Nigeria has equally made significant 
progress. The number of items under import ban reduced from 44 to 26 items in September 2008. Indeed, there is a gradual decline in the number of tariff lines under import ban since 2005 when 1011 HS-tariff lines (or from 19.6% of the total lines) w as reduced gradually to 600 HS-lines (or to 11.7% 
of the total lines) in 2008. A careful analysis re veals that outstanding items in the import prohibition 
list are for protection of public morals; and protec tion of human, animal or plant life or health. 
Nevertheless, the remaining items  under import ban are to be reviewed as soon as appropriate 
alternative mechanisms for dealing with issues that necessitated the import ban in the first instance are 
firmly institutionalised a nd effectively operational. 
4.3 Export Policy 
88. Nigeria's export policy is guided by the need to diversify the country's export baskets and 
markets. With oil and gas export contributing over 90% of total export, changes in the global oil 
prices potentially introduces instability to the sy stem and complicate economic management. In 
addition, the oil and gas sector has fewer backwa rd and forward linkages with the economy thus 
limiting the impact of the sector on poverty allevi ation except indirectly through government 
interventions. Government is therefore promo ting non-oil export especially in agricultural 
commodities, solid minerals and a few manuf actured goods where Nigeria has significant 
unexploited/latent potential for growth. 
89. One of the strategies for promoting non-oil e xport is tagged "Commerce 44" which involves 
identification of eleven agricultu ral commodities, eleven solid mine rals, and eleven manufactured 
products with a view to improving their quality and st andard up to internati onal level and thus making 
them suitable for exports to any country in the world but with specific focus on eleven selected 
markets where the country has preferential mark et access. These are products where Nigeria has 
potential comparative advantage but are constrained by myriad of challenges. Thus, "Commerce 44" 
would provide the required learning experience for re -launching of Nigeria's products into the world 
market. 
90. The need to encourage local processing and increase value addition of Nigeria's export 
informed presence of export taxes on some raw or semi-processed products. This is geared towards 
generating income and providing employment for youths. Export prohibition also applied to some 
products with a view to ensuring self-sufficiency  (mainly on  maize, raw cassava and rough timbers); to encourage value addition (mainly raw hides an d skins, rough or sawn timber, scrap metals, 
unprocessed rubber latex and rubber limps), and to pr eserve cultural heritage (mainly artefacts and 
antiquities). There is a bill at the National Assembly  seeking to prohibit the use of export prohibition.  WT/TPR/G/247 Trade Policy Review 
Page 24 
 
 
 91. The government is currently reviewing the expor t incentive system with a view to making it 
more effective in the promotion of Nigerian e xports. In fact, during the period under review, the 
incentive schemes were reduced to only the Export  Expansion Grant (EEG).  The establishment of 
various export free zones in the country under th e supervision of Nigeria Export Processing Zones 
Authority (NEPZA) is another effort towards the promotion of Nigerian export. The zones are 
established with a view to diversifying the nation's revenue base, attracting foreign direct investment 
(FDI) and generating employment. Since the l ast review, 25 licenses for establishment export 
processing zones were granted and 11 of them are now operational while others are being processed. 
Operators of the free zones enjoy some incentives including one-stop approval by the NEPZA, tax 
holiday, repatriation of capital and profits, 100% fo reign ownership, rent-free land during construction 
of factory, domestic sales of up to 25% pr oduction, and access to essential services such as 
transportation, sanitation, catering, etc.    
4.4 Investment Policies 
92. The agency set up in Nigeria for the promotion of investment and implementation of 
investment policy is the Nigerian Investment Pr omotion Commission (NIPC). The agency was set up 
by an act of parliament in 1995 to among others  facilitate the establishment of businesses in Nigeria 
and to assist both the existing and new investors in the areas of challenges. In order to promote the 
flow of both domestic and foreign investments in the country, government provided many incentives 
to various sectors including industry, oil and gas, agriculture, solid minerals, tourism, 
telecommunications, exporting and Biofuels.  These incentives include tax holiday/tax rebate, capital 
allowance, unconditional transfer of  funds and profits, low interest on loan, non-application of foreign 
exchange regulation and export development fund as well as Export Expansion Grant (EEG). The 
EEG is a post shipment financial incentive granted to the Nigerian exporters who have exported a 
minimum of five million naira worth of goods of Ni gerian origin. The scheme is designed to assist 
Nigerian exporters to expand pr oduction facility for export. Ac quisition of local businesses by 
foreigners is regulated by the Investment and S ecurities Act, 1999. Under this Act, foreigners are 
required to obtain authorisation from the Secur ities and Exchange Commission (SEC) prior to the 
process of taken over, while merger must be approved  by the Federal high court. Nigeria is trying to 
improve its record of investment climate through the establishment of the One Stop Investment Centre 
(OSIC-discussed earlier) and improvement in the state of infrastructure.   
4.5 Sanitary and Phyto-sanitary (SPS) Measures  
93. The Standard Organisation of Nigeria (SON) and National Drug, Law Enforcement Agency 
(NDLEA) are organisations set up by the government  to set standard for processed food and pre-
packaged water.  International standards (such as  those set by Codex Alimentarius Commission and 
International Plant Protection Convention) are empl oyed by these organisations in the performance of 
their responsibilities. Although the Federal Ministry  of Commerce and Industry has the responsibility 
of notifying the WTO on issues relating to SPS, NAFDAC serves as the enquiry point. The 
Agricultural Act empowers the Minister in charge of  Agriculture to control the importation of plants, 
seeds, oil, artificial fertilizers, and related products . Export of fresh plants and plant products to the 
country requires not only a certificate issued by the authorities of exporting countries but also the phyto-sanitary certificate issued by the Nigeria Agriculture Quarantine Service (NAQS). A plant 
Protection Bill (which will replace the National Plant Quarantine Servi ce Act of 1959) has been 
presented to the National Assembly. There have been significant improvements in the compliance 
with SPS regulations as a result of technical assistance provided by the Food and Agriculture Organisation (FAO) to address infrastructure challenges.  In an attempt to raise the level of Nigeria's 
SPS to internationally acceptable standards which will promote Nigeria's export products at the Nigeria WT/TPR/G/247 
 Page 25 
 
 
 international market, the Nationa l Food Safety Management Committe e (NFSMC) was inaugurated as 
an inter-ministerial committee with the respons ibility of coordinating national programmes and 
awareness campaign on food safety and quality control measures. 
4.6 Intellectual Property Rights (IPRs) 
94. A national intellectual property rights Bill has be en drafted to address further issues on 
property rights including plant and animal breeders rights and geographical indicators. In an attempt to curb piracy and provide a favourable atmosphe re for copyright system, the Nigerian Copyrights 
Commission (NCC) initiated the Strategic Action Ag ainst Piracy (STRAP) campaign in 2005. The 
Copyrights Optical Discs Plant Regulations (CODPR) was put in place in 2006.  
(5) T
RADING ARRANGEMENTS  
5.1 Bilateral Trade Arrangements (BTAs) 
95. Nigeria signed Bilateral Trade Arrangements (B TAs) with some countries with the aim of 
securing favourable market access conditions for products  that are of interest to the country. Some of 
these are non-reciprocal preferential trade arrange ments while. Some also include elements of 
investment. In recent years, bilateral trade relati ons between Nigeria and Finland, USA, Ukraine and 
Iran were strengthened. Since the last TPR, Nigeri a has signed BTAs with Iran (2005) and Ethiopia 
(2006) and MOUs with Spain (2006), and Greece (2008). Nigeria also signed MOUs with the 
Continental African Chamber of Commerce, Chicago, USA (2010); International Trade Centre of 
Houston, USA (2010) and China Ministry of Commerce (2006). Other MOUs and BTAs are at 
various stages of negotiations including MOU on economic cooperation between Nigeria and South 
Africa, Botswana, and Namibia which are at va rious stages of negotiations. An MOU on trade 
cooperation and facilitation between Nigeria and American Nigerian  International Chambers of 
Commerce (ANICC) is at an advanced stage of negotiations. Similarly Nigeria is currently negotiating BTAs with India and South Korea.  
5.2 Preferential Trade Arrangements (RTAs) 
96. Nigeria is an active member of a number of regional trade arrangements (RTAs) such as the 
Economic Community of West African States (ECOWAS), D-8, and Global System of Trade Preferences (GSTP) among developing countries. Nigeri a and other ECOWAS member states are also 
negotiating a free trade agreement with the Europ ean Union tagged the West  Africa-European Union 
Economic Partnership Agreement (WA-EU EPA). The period under review witnessed significant 
developments in some of these arrangements. 
D-8 
97. D-8 is a group of 8 developing countries (Ba ngladesh, Egypt, Indonesia, Iran, Malaysia, 
Nigeria, Pakistan and Turkey) with the overriding goal of improving their position in world trade, diversifying and creating new opportunities in trade relations, enhancing par ticipation in decision 
making at the international level and providing bette r standard of living for their citizens. The 7th 
Summit of the group was held in Nigeria in July 2010 and Nigeria is currently providing leadership to 
the group. Preferential trade negotiations among members are about to be concluded. WT/TPR/G/247 Trade Policy Review 
Page 26 
 
 
 Global System of Trade Preferences (GSTP) 
98. The GSTP provides an avenue for preferentia l tariff concessions and other measures of 
cooperation with a view to stimulating trade am ong developing countries within the framework of 
South-South Cooperation. Nigeria participated in the special session of the negotiating committee of 
the GSTP in December 2009. At the 2009 meeting it was agreed by members to reduce tariffs by at 
least 20% on some 70% of goods exported among members. Nigeria also participated at the Sao Paulo Round of Negotiations of the GSTP in December 2010.  
Economic Community of West African States (ECOWAS) 
99. As a foundation member and promoter of regi onal integration in West Africa, Nigeria 
remains firmly committed to the realisation of the goals and objectives of the Economic Community 
of West African States (ECOWAS). The period under re view witnessed giant strides in the integration 
efforts in the sub-region in general and trade libera lisation in particular. The regional body developed 
and launched the regional Vision 2020, a long-term  strategy. A short-term rolling plan for the 
period 2011-2015 was also developed with a vi ew to implementing the ECOWAS Vision 2020. 
100. The tariff liberalisation as noted above was at instance of regional trade liberalisation under 
the auspice of the regional body. The 2005-2006 tariff book was a first step in the implementation of 
the regional tariff harmonisation effort. The basi c four-band rates are 0% for machinery and 
necessities; 5% for raw materials; 10% for semi-f inished good; and 20% for intermediate and/or 
finished goods. With the intervention of Nigeria, a 5th band was added at 35%, which Nigeria is currently operating. The 5th band is to be app lied on selected products that are currently under 
negotiations. For example, Nigeria is currently appl ying the 35% duty on items such as rice, vegetable 
oils, sugar, tobacco various plastics and steel prod ucts, vehicles, and selected electrical appliances. 
The low level of protection offered by the 4t h band account's for Nigeria's deviation from the 
regionally accepted 4-band tariff regime. For exampl e, agricultural safeguard mechanism (ASM), 
compensatory levy (CL) and the digressive protection tax (DPT) are integral components of the common external tariff (CET) programme of th e ECOWAS, but the country lacks technical, 
institutional and financial capacities to take advantage of these provisions.  
West Africa European Union Economic Partnership Agreement (WA-EU EPA) 
101. Nigeria through the ECOWAS Commission has been participating in the negotiations of the 
Economic Partnership Agreement (EPA) with the Eur opean Union (EU) with a view to establishing a 
free trade area between West Africa's and the Europ ean Union. The negotiations were expected to be 
concluded in December 2007 in order to respect WT O waiver granted to trade preferences under the 
Cotonou Partnership Agreement (CPA). When it became clear that given the magnitude and complexity of outstanding issues by the early 2007, interim EPA was prepared and initialled by Ghana and Cote d'Ivoire however it was not initialled by Nigeria. The resultant effects of this action 
and/or inaction is the polarisation of West Africa trade regime with EU: 13 countries with EBA 
regime; 2 countries with interim EPA and Nigeria dow ngraded to GSP. The country's application for a 
GSP+ regime was turned down as EU insisted that Nigeria did not meet one of the conditions required 
for eligibility. 
102. The introduction of a development dimension in to the negotiations in 2009 rekindled the 
process but some outstanding issues are yet to be resolved. Some of the outstanding issues include 
sensitive products to be excluded from liberalisation, application of the MFN clauses, Rules of Origin 
(RoO), Sanitary and Phytosanitary (SPS) measures,  Technical Barriers to Trade (TBT), Contingent Nigeria WT/TPR/G/247 
 Page 27 
 
 
 Protection measures (anti-dumping, safeguard etc.).  Nigeria will require assistance in completing the 
negotiations and more importantly in the impl ementation of the agreement once it is signed. 
African Growth and Opportunity Act (AGOA) 
103. The performance of Nigeria in the United St ates African Growth and Opportunity Act 
(AGOA) has improved in recent years. In terms of agricultural products exports to the United States, 
Nigeria ranked 8th out of 40 beneficiaries of the non-reciprocal trade arrangements. The country's performance in other areas including textiles and appare l, forestry products, minerals and metals is 
also improving. The observed improved performance is attributable to government's sensitization and 
enlightenment campaign and promotional efforts incl uding identification of products that have strong 
potential export capacity.  
104. Evidence suggests that trade impact of these b ilateral arrangements/agreements on Nigeria's 
exports is minimal as oil and gas dominates export to  these countries and regions. This gives credence 
to government intervention programme such as the Commerce 44 and the need to step-up the 
intervention. It is also an eviden ce of the weakness of the different bilateral arrangements/agreements. 
For this purpose it is imperative for the various b ilateral arrangements/agre ements to be product- 
specific. 
5.3 World Trade Organization (WTO) 
105. Nigeria, a foundation member of the World Trad e Organisation, remains firmly committed to 
the tenets of multilateral trading system. Since inception of the WTO in 1995, Nigeria has been 
actively participating in the multilateral trading sy stem including implementation of the various WTO 
Agreements and also in the negotiati ons of the Doha Development Round. 
106. Since the last TPR Nigeria has continued to implement the Uruguay Round Agreements. The 
country made 22 notifications covering the followi ng agreements and issue:  the Agreement on 
Agriculture; subsidies; and law and regulations in the Agreement on subsidies and countervailing 
measures, Anti-Dumping Agreement, Agreement on customs valuation, state trading enterprises, 
agreement on import licensing and Agreement on Techni cal Barriers to Trade. Efforts are being made 
to improve on the level of notifications as subs tantial number of notifications are outstanding. 
107. Beyond notifications, the country is facing challenges in trade legislation. Most of the 
country's trade laws are outdated and are not suitab le for modern trade environment. The need to 
make Nigeria's trade law compatible with evolving trading system has informed the development of a 
wide range of bills including Competition Bill; Protection of intellectual property rights Bill; 
Safeguards and Contingency Trade Measures Bill, wh ile the Public Procurement Act is already in 
place. 
108. These and other legislations are required in or der to establish appropriate institutions for 
enforcement of trade laws and take advantage of modern developments in the management of trade 
policy. Government realised that without an appr opriate Act of parliament compatible with the 
country's international obligations  it would be almost impossible to effectively deal with issues 
relating to dumping (especially its establishment and application of appropriate means of seeking 
redress). The need to establish strong trade rules beco mes more important especially in the context of 
the role assigned to trade in the realisation of the goals of the NV 20: 2020 a nd to this end efforts are 
being stepped up to pass these bills and establis h appropriate institutions necessary for their 
implementation. WT/TPR/G/247 Trade Policy Review 
Page 28 
 
 
 109. The need to secure Nigeria's compliance with minimum standards of Intellectual Property 
Rights (IPRs) protection in compliance with WTO TRI PS Agreement is the main driving force of the 
efforts at drafting National Bill on intellectual proper ty protection. Added to this are the need to 
ensure coherence between Nigeria's trade policies,  industrial policies and technological needs; to 
integrate IPRs more explicitly and strategically into  the economic framework w ith particular reference 
to addressing the impact of IPRs in key areas such as education, health and agriculture; to stimulate 
domestic innovation and facilitate  technology transfer for the benefit of small and medium 
enterprises; to further the integra tion of the country into the multilate ral trading system and increase 
the contribution of IPRs to the achievement of su stainable socio-economic growth and development. 
Although the efforts are still at the preliminary stag e, it is hoped that once the initial stages are over it 
will proceed on a fast track. 
110. Efforts at facilitating trade received a boost du ring the period under review. The need to 
create a national electronic single window has been id entified with the aim to modernise foreign trade 
procedures and formalities. The ultimate goal is to  create a competitive environment of cross border 
trade by greatly reducing and simplifying processing time and costs of doing business. The new 
initiatives is to take advantage of the advancem ents in the information communication technology 
(ICT) that allow  for automating, harmonising a nd simplifying exchange of information without 
compromising its integrity..    
111. A task force on trade facilitation comprising stakeholders from MDAs and OPS is currently 
working towards promoting reduction of trade barr iers, harmonisation and si mplification of trade 
procedures, clearance and documentation, and ot her non-tariff barriers (NTBs); including Technical 
Barriers to Trade (TBT) and Sanitary and Phyto-Sa nitary (SPS) measures. The establishment of the 
task force was sequel to the recommendations b ased on the first phase of the WTO needs assessment 
on trade facilitation carried out in Nigeria in 2008. 
112. Nigeria has been participating in the nego tiations under the Doha Development Agenda 
(DDA). In the course of its participation, Nigeria is a member of the African Group, the ACP Group 
and the G-90 Group.  The country is also in diffe rent sectoral negotiation groups such as Agriculture 
(G-20 and G-33 Groups) and NAMA (one of the Pa ragraph 6 countries). Nigeria is one of the 
proponent of geographical indica tions and disclosure of genetic resources and traditional knowledge 
in the application of patent (W52 proposal in TRIPS negotiation). Nigeria has its own 
mandate/interest in the different sectoral negotiatio ns. Thus, in NAMA, the country's interest is 
reduction in the escalation of tariff and maintenance of flexibility as well as extension in the coverage 
of bound tariffs. With respect to services, Nigeria ha s submitted an initial offer, and her interest in the 
negotiation is to attain improved market access under m ode 4.  In the area of agriculture, the country 
has particular interest in improved market access in to the developed countries' markets. It is also 
interested in reduction of domestic support measures and removal of export subsidies. 
5.4 Aid for Trade 
113. During the period under review, Nigeria received aid from foreign donors particularly from 
developed countries (US, EC, Netherland, Austria,  and Denmark) and their agencies (USAID and 
DFID) as well as multilateral monetary institutions  such as World Bank and African Development 
Bank. However, aid accounts for less than 1.0% of  Nigeria's GDP. The assistance has been focused on 
few sectors particularly agriculture, transport, energy and banking and finance as well as 
communications. The new development in this area is that there is an agreement among the four major 
donors (World Bank, USAID, DFID and AfDB) to operate a joint single country partnership strategy for the period 2010-2013. Nigeria WT/TPR/G/247 
 Page 29 
 
 
 (6) MEDIUM -TERM OUTLOOK  
114. The last six years have seen significant cha nges in the economic management of Nigeria, 
trade policy inclusive. Various factors including deve lopments that are external to the economy (such 
as the fuel, food and financial crisis; and vagaries in the international oil prices) and internal factors 
(including efforts at establishing a medium-to l ong-term plan and improvement in governance etc.) 
have impacted on the various sectors of the economy . Developments in trade policy have been shaped 
significantly by the efforts at integrating the econom ies of West Africa especia lly the establishment of 
a Common External Tariff (CET) and effort at creating a common currency. 
115. The NV20:2020 reflects the aspiration of the G overnment of Nigeria (GON) for the economy 
to become one of the top twenty economies (20) of the world by the year 2020. The Vision targeted at 
least $900 billion GDP and a per capita income of at least $4,000 per annum. These targets compared with the current (2009) figures of $173 billion an d $1118 for GDP and per capita income respectively 
left no one in doubt about the seriousness of inte ntion of the government in transforming the economy 
and the fact that NV20:2020 will, in the forese eable future, drive the policies and programmes 
including trade policy of the country. The Vision is to be implemented through three medium-term 
national development plans first of which is the First National Implementation Plan for NV20: 2020 
covering the period between 2010 and 2013. This 4-y ear plan articulates projects and programmes for 
the key sectors of the Nigerian economy as well as the critical policy priorities highlighted in the Vision. It also defines the path to address key challenges impeding the country's ability to optimally 
harness its abundant human and natural resources. Th ere is an in-built mechanism for monitoring and 
evaluating progress against set targets. The draft N EEDS 2 and the 7-point agenda coalesce into the 
NV20:2020 which re-introduced long-term pers pective in the management of economy. 
116. The NV20: 2020, DDA, GSTP, D8 and WA-EU EPA  negotiations are foreseen as the main 
drivers of developments in both the economic re form, in general, and trade policy reform, in 
particular. The first National Implementation Plan for the Nigeria Vision 20: 2020 which covers the 
period between 2010 and 2013 has identified some of the government interventions to include 
infrastructure, in general, and power and transpor tation, in particular. Although these are elements of 
general physical infrastructure they are trade-relate d and production enablers. It is believed that if 
these basic infrastructures are fixed, cost of production and of doing bus iness would greatly be 
reduced. The implementation plan also has a chap ter on trade and commerce in recognition of the 
important role of trade in the process of achieving th e Vision. Some of the strategies identified include 
improving non-oil export performance, strengthening institutions responsible for export promotion, 
promoting an export culture and trade capacity building of the private sector; improving strategies to increase utilization of preferences, improving inte r-institutional coordination on trade policy among 
government agencies, harmonising institutions for ne gotiations and improving preparations for trade 
negotiations; reviewing existing re gulations; strengthening on reforms of the Nigeria Customs 
Service, the Nigeria Ports Authority and other operations at the ports; continuing with the tariff 
rationalisation and harmonisation in line with best  international practices; and strengthening trade 
regulatory agencies with a view to making them more effective. 
117. Priority programmes identified include "Co mmerce 44" initiative; trans-national border and 
regional markets; and one-product one-local gov ernment initiative. "Co mmerce 44" aimed at 
promoting export through adoption of "univer sally acceptable best pr actices in agricultural 
production, manufacturing, processing, packaging and marketing of identified products to enhance 
their competitiveness in the world market". This initiative was info rmed by the need "to take 
advantage of the different concessions offered by su bsisting bilateral and multilateral agreements as WT/TPR/G/247 Trade Policy Review 
Page 30 
 
 
 well as MoUs to facilitate smooth export of Nigerian  products". To a reasonable extent, the initiative 
is to provide learning experience which will later be applied to other products. 
118. Trans-national border and regional markets are aimed at "formalizing the informal trade 
currently prevailing in the country's borders".  Apart from impacting positively on government 
revenue through payment of necessary duties, the se markets would generate employment, boost 
business and investment activities, curtail incidence of smuggling, stem the tide of illegal immigrants 
and, hopefully, stem the tide of cross-border crim e. One-product-one local government initiative is to 
encourage each of the 774 local governments to iden tify a product that would be promoted with a 
view to generating employm ent and create wealth. 
119. Finally, the Implementation Plan identifies the following as the flagship projects for trade and 
commerce: establishment of industrial clusters in  the States to boost processing and production of 
exportable products; procurement of scanners to enhance ASYC UDA; increase value addition to 
Nigeria's export potentials in agriculture, minerals , oil and gas etc.; establishment of an export house 
and a market intelligence centre; continuing th e implementation of "Commerce 44" initiative; 
promotion of border markets; processing of ag ricultural produce including promoting industrial 
linkage; and development/production of liberali sed WTO-compatible trade regime devoid of 
unpredictability, uncertainty and lack of transparency. 
120. The negotiations of DDA, GSTP, D8 and WA-E U EPA, hopefully, will be completed soon 
and its implementation would raise challenges for Nigeria in different areas including developing 
appropriate mechanism for effective supply res ponse and competitiveness of made in Nigeria goods; 
customs valuation and trade facilitation in genera l; rules of origin and more importantly fiscal 
adjustment including development of new tax regime s and strengthening efficiency of existing ones. 
121. Aid for trade and EPA Development Progr amme (EPADP) are two but interrelated 
intervention programmes that best address some of th e concerns raised in the medium to long-term 
outlook for Nigeria's trade policy. Assistance and support have been identified in the following areas: 
trade policy advocacy, trade policy development; enhancement of the competitiveness of supply 
capacity; compliance support infrastructure and serv ices; physical trade infrastructure, legal and 
regulatory framework, trade facilitation and trade related financial services. 
__________