WT/TPR/S/147 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) INSTITUTIONAL FRAMEWORK  
1. Nigeria is constitutionally a federation of 36 stat es.  Its most recent constitution entered into 
force in May 1999.1  The Constitution represents the supr eme body of law, and provides for a 
presidential system of government consisting of an executive, a legislature and a judiciary, each 
acting as a check and balance on the powers of the ot her two.  It also provides for three tiers of 
government:  federal, state, and local.  
2. At the federal level, the Government is headed by the President, who is elected into office for 
a period of four years, renewable once.  A candida te for the presidency must nominate another person 
from the same political party for the position of vi ce-president. The President is the head of the 
Federal State, the Chief Executive of the Fede ration, and the commander-in-chief of the armed 
forces.2  The President is empowered to appoint minist ers of Government of the Federation, after the 
list of the nominees is screened and confirmed by th e legislature.  The President, Vice-President and 
Ministers form the Federal Executive Council (FEC), with the President as th e chairman;  no member 
of the FEC can serve concurrently as a member of the legislature.  The FEC is, in general, responsible 
for the initiation and implementation of the policies and programmes of the Federation.  In certain 
matters (e.g. national security, judicial services) the President consults with other federal bodies.3  The 
State Government is vested with executive powers at the state level.  Each state has local government 
areas (LGAs), which are administered by local government councils.  
3. The National Assembly is the legislature at the federal level.  It is bicameral, comprising an 
upper house, the Senate, and a lower house, the Hou se of Representatives.  The Senate consists of 
109 Senators: three from each of the 36 States a nd one from the Federal Cap ital Territory (Abuja).  
The House of Representatives has 360 members, each representing a constituency of almost equal 
population.  The National Assembly has exclusive competence in passing legislation on issues with 
country-wide ramifications (including trade and trad e-related areas), whereas on other issues, it may 
share competence with the local state-leve l legislature (the House of Assembly).4  The latter legislates 
at the state or local Government level on, inter alia , the collection of fees and taxes; and the 
development of the agricultural, and industrial sect ors. The President may attend any joint meeting of 
the National Assembly or any meeting of either House of the National Assembly.  
4. At the federal level, there is a Supreme Court,  Federal High Court, High Court of the Federal 
Capital Territory (Abuja), and three appeal courts  (the Court of Appeal, the Customary Court of 
Appeal, and the Sharia Court of Appeal). The Supr eme Court is the highest court and has jurisdiction 
over disputes between the Federation and a State, di sputes between States, and appeals from the Court 
of Appeal. The Federal High Court exercises jurisdiction over, inter alia , civil causes and a wide 
range of economic issues, including trade and trad e-related ones.  The Hi gh Court of the Federal 
Capital Territory (Abuja) has jurisdiction over crim inal and other civil proceedings not under the 
exclusive jurisdiction of the Federal High Court.  The courts of appeal also have jurisdiction to hear 
and determine appeals from all other federal and stat e level courts, including the Customary Court of 
Appeal and the Sharia Court of Appeal, as well as on certain questions relating to the office of the 
                                                      
1 The Constitution of the Federal Republic of Nigeria,  1999.  Available at:  http://www.nigeria-law.org. 
2 Constitution of the Federal Republic of Nigeria, 1999, Article 130. 
3 The President has recently constituted an Economic  Management Team to advise him, on a weekly 
basis, on policy directions geared towards revamping the economy, before the FEC meetings (Office of Public 
Communications, 2003b). 
4 The areas in which the National Assembly has excl usive and shared competence are listed in Part I 
and Part II respectively, under the second schedule of  the Constitution of the Federal Republic of Nigeria. Nigeria WT/TPR/S/147 
 Page 13 
 
 
President and Vice-President.  At the local state level, jurisdiction over civil and criminal proceedings 
are under the State High Court;  whereas questions  relating to Islamic personal law regarding 
marriages concluded in accordance with Islamic la w, and on customary law ar e under the State Sharia 
Court and State Customary Court, respectively.  El ection tribunals have also been established in each 
State to exercise jurisdiction over petitions concerning the validity of persons elected to the office of 
Governor and Deputy Governor of a State as well as membership of any of the legislatures.  Ongoing reforms of the judicial sector seek to address, inter alia , corruption and underfunding, which 
undermine its effectiveness and efficiency.
5  
(2) TRADE POLICY FORMULATION AND IMPLEMENTATION  
5. The Federal Government's work programme, in cluding economic policies, is formulated and 
implemented by means of laws. In general, bills introduced by the Federal Executive Council, to the 
National Assembly, must be passed by both the Senate and the House of Representatives, and 
assented to by the President, before they become law. Bills are passed in both Houses by a simple 
majority of votes cast.  However, if the President withholds his assent, the bill will require a two-thirds majority in both houses, after which it becomes law, without the President's assent.  
6. Bills may be initiated, drafted and proposed by an y relevant ministry, for consideration by the 
Federal Executive Council. The Federal Ministry of Commerce is the primary government body, 
charged with the responsibility of formulating and implementing trade policy.  However, the Federal 
Ministry of Petroleum Resources formulates and implements all policy matters for the marketing of petroleum and petroleum products;  responsibilit y for export permits remains under the Federal 
Ministry of Commerce.  Beyond these two line mini stries, the Central Bank of Nigeria (CBN), the 
Federal Ministry of Finance, and the Federal Minist ry of Transport also have an input in the overall 
development of Nigeria's trade policy. A Trade Policy Advisory Council coordinates trade policy 
formulation and implementation amongst ministries.  
7. Input is also provided by government agencies, including:  Nigeria Customs Service, Nigeria 
Ports Authority, Nigeria Export Promotion Council,  Nigeria Export and Import Bank, Nigerian Export 
Processing Zone Authority, Nigeria Investment Promotion Commission, Nigeria Tourism 
Development Corporation, Bureau of Public Ente rprises, Nigerian National Petroleum Corporation, 
National Agency for Food and Drug Administration a nd Control, and the Standard Organization of 
Nigeria.  The Ministry of Commerce has establis hed a National Focal Point (NFP), which serves as a 
forum for consultation and collaboration on trad e issues among relevant government ministries, 
agencies, and the private sector.  The NFP comp rises a committee on goods, a committee on services 
and a committee on trade-related intellectual property rights;  it has also established commercial desks 
in relevant ministries. 
8. Since the return to democracy, the Governme nt has engaged the organized private sector 
(OPS) (private sector associations) more in the form ulation of trade policy.  The OPS includes:  the 
Manufacturers Association of Nigeria (MAN);  the National Association of Chambers of Commerce, 
Industry, Mines and Agriculture (NACCIMA);  Association of Nigerian Exporters;  National 
Association of Small Scale Indus trialists;  banking institutions; labour unions;  and professional 
associations.  They influence trade policy formulati on through their membership of certain ministerial 
committees, and through open consultations held with  the OPS before and after the presentation of 
each year's budget statement.  The OPS also arti culates its views on the Government's trade policy 
through workshops, seminars and the media.  Wh ereas the OPS is fairly vocal in defending its 
interests, there are few civil society groups repr esenting the interest of consumers and the large 
                                                     
 
5 Federal Ministry of Justice (undated).  WT/TPR/S/147 Trade Policy Review 
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numbers of rural dwellers;  thus, trade policy formulation process may be  limited to serving the 
interests of a vocal minority.  
9. The process could be further enhanced by ex tending participation to other sections of 
Nigerian society; improving access to relevant in formation (including on-line);  regularizing 
consultations between the private sector, civil soci ety, and other stake holders;  and improving trade 
policy development capacity in the relevant governme nt ministries and agencies as well as in other 
trade-related civil society organizations. 
10. The bulk of Nigeria's trade legislation has remained largely unchanged since its last Trade 
Policy Review in 1998.  The main legislation gove rning customs regulations and procedures is the 
Customs and Excise Management Act of 1990.  Im port and excise duties, and the list of products 
subject to import prohibition are contained in the Customs, Excise Tariff Decree No.4 (1 March 1995), as amended.  The tariff and import prohibition schedule contained in this Act lapsed 
in 2001 and ad hoc annual adjustments have been made  since then;  and in general, these have led to 
an increase in border protection, as well as uncertain ty regarding future trade policy direction.  
Preshipment inspection procedures are governed by the Pre-Shipment Inspection of Exports 
Act No.10 of 1996 and the Pre-Shipment Inspect ion of Imports Act No.11 of 1996.  Various 
regulations also cover the provision of export incenti ves, the protection of intellectual property rights, 
and government procurement.  Currently, Nigeri a has no legislation on competition policy and 
safeguards, though draft bills are under preparation (Table II.1). 
Table II.1 
Selected trade and trade-relat ed legislation, December 2004 
Area  Title of law/regulation 
Customs Customs and Excise Management Act, Cap 84, LFN, 1990  
 Customs, Excise Tariff, etc. (Consolidation Act No. 4, 1995, as amended by Acts Nos. 13 
and 33 of 1996;  20 of 1998;  and 10 and 29 of 1999 
Pre-shipment inspection Pre-shipment Inspection of Exports Act No. 10, 1996  
 Pre-shipment Inspection of Imports Act No. 11, 1996 
Import prohibitions Endangered Species (Control of International Trade and Traffic) Act, Cap 108, LFN, 1990  
Export promotion and assistance Export Incentives (Miscellaneous Provisions) Act, Cap 118, LFN, 1990  
 Nigerian Export Credit Guarantee and Insurance Corporation Act, Cap 305, LFN, 1990 
 Nigerian Export Promotion Council Act, Cap 306, LFN, 1990 as amended by Act No. 64 of 
1992 
 Nigeria Export-Import Bank Act No. 38, 1991 
 Nigeria Export Processing Zones Act No. 63, 1992 
 Export of Nigerian Produce Act, Cap 119, LFN, 1990 
 Export Produce (Federal Powers) Act, Cap 120, LFN, 1990 
 Oil and Gas Export Free Zone Act No. 8, 1996 
Export prohibition Export (Prohibition) Ac t, cap 121, LFN, 1990  
Intellectual property Trade Marks Act, Cap 436, LFN, 1990  
 Industrial Inspectorate Act, Cap 180 LFN, 1990 
 Patents and Designs Act, Cap 344, LFN 1990 
 National Office of Industrial Property Act, Ca p 268, LFN, 1990, as amended by Act No. 82, 
1992 
Standards and technical regulations Standards Organization of Nigeria Act, Cap 412, 1990, as amended by Act No. 18, 1990  
Price controls Productivity, Prices and Income Board Act, Cap 372, LFN, 1990  
Taxation Personal Income Tax Act No. 104, 1993  
 Value Added Tax Act No. 102, 1993 
 Industrial Development (Income Tax Relief) Act, Cap 179, LFN 1990 
Business and Investment Companies and Allied Matters Act No. 1, 1990  
 Labour Act, Cap 198, LFN, 1990 
 Bankruptcy Act, Cap 30, LFN, 1990, as amended by Act No. 109, 1992 
 Table II.1 (cont'd) Nigeria WT/TPR/S/147 
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Area  Title of law/regulation 
 Companies Income Tax Act, Cap 60, LFN, 1990 
 Industrial Promotion Act, Cap 181, LFN, 1990 
 Investment and Securities Act No. 45, 1999 
 Nigerian Investment Promotion Commission Act No. 16, 1995 as amended by Act No. 32, 
1998 
 Public Enterprises (Privatization and Commercialization) Act, No. 28, 1990 
Others Trade Disputes Act, Cap 432, LFN, 1990  
 Trade Disputes Essential Services Act, Cap 433, LFN, 1990 
 Foreign Exchange (Monitoring and Mis cellaneous Provisions) Act No. 17, 1995 
 National Shipping Policy Act, Cap 279, LFN, 1990 
 Nigerian Shippers' Council (Freight Stabiliza tion Fees on Imports and Exports) Regulations 
 Nigeria Shippers' Council (Local Shipping Charges on Imports and Exports) Regulations, 
S.I. 7, 1997 
 External Trade Letters of Credit (Control) Act, Cap 124, LFN, 1990 
 Consumer Protection Act, No. 66, 1992 
 Trade Malpractices (Miscellaneous Offences) Act No. 67, 1992 
Source: Federal Ministry of Commerce (2002), Trade Policy of Nigeria . 
(3) TRADE POLICY OBJECTIVES  
11. Under the National Economic  Empowerment and Develo pment Strategy (NEEDS)6, the 
medium-term economic strategy for 2003-07, the Government seeks to reduce poverty, generate 
employment, create wealth, and accelerate economic growth.  The long-term objectives include social 
and economic transformation of Nigeria on a sustaina ble, competitive, and prosperous basis, and the 
Millennium Development Goals. To achieve these  goals, Nigeria has embarked on wide-ranging 
macroeconomic (including trade and trad e-related) and structural reforms.7  
12. The Nigerian Government considers trade as th e main engine of its development strategy 
because of its ability to create jobs, raise income s, expand markets, facilitate competition, and 
disseminate knowledge.8  Its trade policy is geared towards enhancing the competitiveness of 
domestic industries with a view to, inter alia , encouraging local value-added, and promoting and 
diversifying exports.  Trade policies also seek (thr ough the gradual liberalization of the trade regime) 
to create an environment conducive to increased fore ign capital inflows, and to transfers and adoption 
of appropriate technologies.  Nigeria intends to libera lize its trade regime in a manner that ensures that 
the resultant domestic cost of adjustment does not outweigh the benefits.  The reforms are designed to 
allow a certain level of protection of domestic indus tries and enterprises.  In practice, on the tariff 
front, this appears to have translated into tariff esc alation, i.e. higher effective protection in several 
industries, with lower import duties on raw material s and intermediate goods unavailable locally, and 
relatively high import duties on finished goods that might compete with local production (Chapter III(2)(iii)).  Trade liberalization is being carried out multilaterally, preferentially 
(section (5)), and on a unilateral basis.
9  In the implementation of its trade policies, Nigeria has re-
affirmed its commitment to adhere to its multilateral and regional obligations.10 
                                                      
6 NEEDS succeeded the "Obasanjo's Economic Directions, 1999-2003", development plan.  
7 The reforms include privatization of state-owned en terprises, liberalization of the economy, reduction 
of corruption, improvements to transparency and account ability, reduction of waste in government expenditure, 
improvement of public revenue, and governance and institutional strengthening.  Some of these reforms have already commenced (2004 Budget Speech, 18 December 2003).  
8 Office of Public Communications (2004a).  
9 Federal Ministry of Commerce (2002). 
10 Federal Ministry of Commerce (2004).  WT/TPR/S/147 Trade Policy Review 
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13. Trade-specific measures scheduled for implem entation include:  the reduction of the 
uncertainty and unpredictability of the trade regime ;  reduction of tariff rates, as part of Nigeria's 
commitments under loan agreements with the IMF;  the harmonization of Nigeria's tariff schedule 
with the ECOWAS common external tariff (CET);  implementation of the ECOWAS protocol on free 
movement of goods and people;  the operationa lization of existing export processing zones (EPZs) 
and the establishment of new ones;  the granting of export-processing status to factories that contribute to non-oil exports; the establishmen t of an export production village scheme; the 
negotiation of preferential trade agreements to di versify trade; the provision of incentives to 
encourage non-oil exports;  the implementation of po rt reforms to ensure timely clearance of goods 
and eliminate malpractices;  the replacement of th e preshipment inspection scheme with inspection at 
destination;  and the streamlining of the exchange rate regime (Chapters I and III). 
14. Other envisaged trade-related measures incl ude transforming the Consumer Protection 
Council into the Nigerian Trade and Competiti on Commission to handle issues relating to, inter alia,  
anti-trust and competition policy, contingency trade measures, and consumer protection;  establishing 
an intellectual property commission and a bankruptcy commission;  strengthening the capacity of 
trade-related institutions, including the Ministry  of Commerce;  enhancing awareness amongst policy 
makers and other stakeholders of Nigeria's multilate ral and regional obligati ons and the opportunities 
that they present;  improving the trade infrastruct ure (including roads);  privatizing state-owned 
enterprises;  and deregulating some service sub-sectors. 
15. The main challenge lies in implementing the reforms.  As clearly indicated in the Vision 2010 
Report , Nigeria has a record of articulating clear policies and of failing to implement them effectively.  
In many cases, therefore, policy statements have tende d to be mere statements of intention that do not 
lead to implemented actions.  Among the reasons for this are the unrealistic targets and action plans, 
resource constraints and poor allocation, poor coordi nation between the different tiers of government, 
rapid turnover of people in high authority, announcin g policies before legislative instruments are put 
in place for their implementation, politicization at the highest levels of the civil service, and the lack 
of equitable remuneration structure in the civil service.
11  Some of these concerns are being addressed 
by the NEEDS.  For instance, NEEDS is the first plan in Nigeria to have benefited from nationwide 
participation and under which the fe deral and state governments coordi nate their planning framework.  
Furthermore, it enjoys support from the Executive and the National Assembly, and serves as an action 
plan upon which budgeting and resource a llocation decisions are to be made.12 
(4) INVESTMENT REGIME  
16. In line with its development strategy, Nigeri a seeks to establish the private sector as the 
engine of economic growth, with the Government  providing the enabling environment for private 
investors, both domestic and foreign, to operate.  Several measures have been put in place for this 
purpose. 
17. The main law governing investment is the Nigerian Investment Promotion Commission 
(NIPC) Decree No.16 of 1995;  the NIPC was esta blished under this law as  a federal agency, and 
succeeded the Industrial Development Co-ord ination Committee.  The NIPC seeks to, inter alia :  
coordinate, monitor, encourage, and provide necessary assistance and guidan ce for the establishment 
and operation of enterprises in Nigeria; initiate and support measures that enhance the investment 
climate in Nigeria; promote investment in and outside Nigeria; and assist incoming and existing 
                                                      
11 Vision 2010 Report Committee (undated).  This Vision 2010 Report was the development plan in 
place prior to the return to Democracy  in 1999.  It was discussed in the previous TPR of Nigeria (see 
WTO, 1998, Box II.1). 
12 Office of public Communications (2004b). Nigeria WT/TPR/S/147 
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investors by providing support services. The NIPC is meant to serve as a one-stop facilitating centre 
for the registration of companies, the acqui sition of business permits , and expatriate quotas13, and a 
host of incentives;  this is not yet fully the case. 
18. Under the NIPC Decree, investors (both domestic and foreign) can participate in all sectors of 
the economy with the exception of the production of  arms and ammunition, narcotic drugs, and 
psychotropic substances. Foreign companies are perm itted to operate in Nigeria through a subsidiary 
that must be incorporated in Nigeria.14  Under the Companies and Allied Matters Act of 1990 (as 
amended), the Corporate Affairs Commission, inter alia , regulates and supervises the formation, 
incorporation, and registration of companies in Nigeria.  
19. In consonance with its bid to boost investment, Nigeria's investment regime offers a plethora 
of incentives, including tax holidays, reduced taxes,  capital allowances, capitalization of expenditure, 
accelerated depreciation, import duty rebates, inve stment tax credits, repatriation of profits, and 
transferability of funds.  Some of these incentives can be negotiated on a case-by-case basis with both 
federal and local state authorities (Table II.2).  In  addition, further investment opportunities are being 
created through the current privatization programme (Chapter III(4)(iv)). 
20. In recent years, Nigeria has entered into doubl e taxation agreements (DTAs) with Belgium, 
Bulgaria, Canada, Czech Republic, th e Netherlands, Pakistan, the Philippines, Romania, South Africa, 
and the United Kingdom.  Negotiations for other DTAs are in progress with Brazil, India, Republic of 
Korea, Russian Federation, Tunisia, and Turkey.  As  a concession to its partners, a lower tax rate of 
7.5% is applied on dividends, interests, rents a nd royalties going to countries with which Nigeria has 
DTAs.  Nigeria has also signed investment promoti on and protection agreements (IPPAs) with Egypt, 
France, Germany, Italy, the Netherlands, Democratic  People's Republic of Korea, Republic of Korea, 
Romania, South Africa, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.  Negotiations for other IPPAs are in progress with Belgium, th e Russian Federation, and the United States.  
Table II.2 
Investment incentives 
Sector Description 
All sectors Tax-related:  
(i) 30% companies income tax in all sectors, except petroleum;  (ii) five-year tax holiday on companies investing in pioneer industries;  (iii) tax relief on up to 140% of expenses on research and development;  (iv) 2% tax concessions for 
a period of five years for industrial establishments that set up in-plant training;  (iv) 20% of the costs of providing infrastructure that should normally have been borne by government (e.g. electricity) are tax deductible;  (iv) tax holidays of up to seven years on investments in economically disadvantaged areas;  (v) tax concessions on companies 
with high labour capital ratio;  (vi) 10% tax concession for five-years on local value-added;  (vii) tax credit of 20% for 
five years to industries that attain a certain minimum level of local raw material sourcing and utilization; capital 
allowances range from 5% to 30% depending on expenditure. 
 Others 
(i) unconditional transferability of funds through an authorized dealer in freely convertible currency;  (ii) no enterprise 
shall be nationalized or expropriated by any government of the federation, unless the acquisition is in the national interest or for public purpose, in which case there are legal procedures to follow;  (iii) any company incorporated in 
Nigeria is allowed to have access to land rights for the purpose of its activity in any state in the country. 
Table II.2 (cont'd) 
                                                      
13 The existing expatriate quota requirement for foreign nationals working in Nigeria is in the process 
of being replaced with a work permit.  
14 Exemptions to this requirement exist for: foreign companies invited to Nigeria by or with the 
approval of the Federal Executive Council to execute a specified individual project; foreign companies in Nigeria for the execution of a specific individual loan project on behalf of a donor country or international 
organization; foreign state-owned companies engaged solely in export promotion; and engineering consultants 
and technical experts engaged in any individual government-contracted (including from government agencies) project.  WT/TPR/S/147 Trade Policy Review 
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Sector Description 
Industrial sector (i) companies investing in economically disadvantaged areas, benefit from a 100% tax holiday for seven years and an 
additional 5% depreciation over and above the initial capital depreciation;  (ii) for a five-year period companies also 
benefit from tax concessions of up to 30% if involved in local raw material development, 10% if involved in local value added, 15% if involved in labour-intensive processing, 10 % if involved in export-oriented activities, 2% if involved in-plant training;  (iii) companies with turnover of less than N1 million are taxed at a low rate of 20% for the first five 
years of operation if they are into manufacturing;  (iv) up to 120% of expenses on research and development are tax 
deductible;  (v) up to 20% of the cost of providing infrastructure such as roads, water, electricity, where they do not exist is tax deductible;  (vi) all excise duties have been abolished (since 1 January 1999);  (vii) 25% import duty rebate;  (viii) tax allowance in respect of qualifying capital expenditure incurred within five years from the date of the approval 
of the project;  (ix) dividends of companies in the manufacturing sector with turnover of less than N
 100 million are tax-
free for the first five years of their operation. 
Energy  All investments in this area are considered to be pioneer, hence benefit from a five to seven-year tax holiday. 
Oil and gas  (i) tax rate under the Petroleum Profit Tax (PPT) Act to be at the same rate as company tax, currently at 30%;  
(ii) capital allowance at the rate of 20% per annum in the first four years, 19% in the fifth year and the remaining 1% in 
the books;  (iii) investment tax credit at the current rate of 5%; (iv) tax holiday under pioneer status;  (v) capital allowances;  (vi) repatriation of profits;  (vi) no foreign exchange regulation;  (vii) dividend derived from manufacturing companies in petro-chemical and liquefied natural gas subsector are exempt from tax. 
Agriculture (i) companies in the agri-allied business do not have their capital allowance restricted to 60% but graduated in full – 
100%;  (ii) agri-allied plant and equipment enjoy enhanced capital allowances of up to 50%. 
Solid minerals (i) three to five-year tax holiday;  (ii) possible capitalization of expenditure on exploration and surveys;  (iii) provision 
of 100% foreign ownership of mining companies or concerns;  (iv) capital allowance. 
Tourism (i) tax holidays;  (ii) longer moratorium and import duty exemption on tourism-related equipment;  (ii) tax exemption 
on 25% of incomes derived from tourists by hotels.  
Telecommunications Rebate and tax relief. 
Exporting (i) company profits in respect of goods exported are exempt from tax under certain conditions;  (ii) profits of companies 
whose supplies are exclusively input to the manufacturing of products for export are excluded from tax;  (iii) export 
processing zone companies are allowed full tax holidays for three consecutive years;  (v) investment tax credits;  (vi) retention of export pro ceeds in a foreign currency in a domiciliary account with a Ni gerian bank;  (vi) export 
development fund to cover expenses on export promotion activities;  (vii) export adjustment fund to compensate 
exporters for high cost of local production, arising mainly from infrastructural deficiencies;  (viii) unrestricted 
remittance of profits and dividends;  and (ix) zero-rated VAT.  
Source: Information provided by Nigerian authorities.  
21. A recent World Bank survey on the business environment in Nigeria observed that the 
incentives, inter alia , seem to overlap; are unclear in some cases; and are provided usually too late to 
be of any value.  Furthermore, responsibility for the administration of incentives is unclear and overly 
complicated.  Hence, few firms were observed to have increased their investment or exports as a 
result of the incentives;  and some managers did not  bother to learn what incentives were available, 
viewing tax incentives as a bonus, but not something (reliable enough) on which to base plans.  Other problems in the Nigerian business environment in clude: inadequate and unreliable infrastructure 
provision, in particular frequent power outag es and poor transportation network; corruption
15;  high 
customs tariffs;  high port charg es;  high interest rates; unstable exchange rates;  heavy collateral 
requirements;  numerous administrative barriers and poor quality of government services, in particular 
at the state and local government levels; and a slow and corrupt judicial system.16  All of these 
contribute, in no small way, to the high-cost business environment and the resultant reduction in 
competitiveness of the Nigerian economy, including its exports.  Some of these concerns are being 
addressed.  For instance, Nigeria's determination to tackle the problem of co rruption has led to the 
passing of the Corrupt Practices Act, and the establishment of the Independent Corrupt Practices and 
Other Related Offences Commission.  
                                                      
15 In general, Nigeria has consistently been ranked second from the bottom by the Transparency 
International Corruption Perception Index, over the last tw o decades.  Further information is available online at:  
http://www.transparency.org/cpi/index.html#cpi [27 August 2004]. 
16 World Bank (2002a). Nigeria WT/TPR/S/147 
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(5) TRADE AGREEMENTS AND ARRANGEMENTS  
(i) Multilateral agreements 
22. Nigeria became an original Member of the WT O on 1 January 1995, following ratification of 
the WTO Agreement on 6 December 1994.17  The Marrakech Agreemen t Establishing the WTO has 
not been incorporated into Nigerian law, and ther efore the legal status of WTO obligations in the 
domestic legal system is not yet clearly established.  In particular, traders and investors are unable to invoke WTO provisions in domestic courts as the WTO Agreement does not in itself have the force of 
law in Nigeria.
18   
23. Nigeria has not signed any of the plurilateral agreements concluded under the WTO.  It has 
not been involved in any trade-rela ted dispute under the WTO Agreements.  
24. In accordance with its obligations, Nigeria has submitted notifications to the WTO under 
various WTO Agreements (Table II.3).  However, since 1998, several notifications remain outstanding, e.g. on agriculture, TRIMs, import licence procedures, rules of origin, contingency trade measures, and GATS Articles III.3 and VII.4.   
25. As regards the Doha Development Agenda (DDA), Nigeria places special importance on 
negotiations on agriculture, in particular on the removal of export subsidies and domestic support 
measures;  and the provision of substantial market access to products of export interest to developing 
countries.  On non-agricultural market access (NAMA), it seeks the reduction of high tariffs and tariff 
escalation on products of interest to developing countries.  Nigeria seeks greater opportunities in 
services, particularly through the movement of na tural persons (mode 4).  Technical assistance to 
developing countries, including in capacity building, is a core interest. 
Table II.3 
Selected notifications to the WTO, March 2005 
Agreement and notification required Documents and notifications received  
GATT 1994  
Schedule of concessions on market access  Schedule XLIII, submitted on 15 April 1994  
Article XVII:4(a) G/STR/ N/8/NGA, 19 November 2002 
GATS  
Communication of Nigeria's Schedule of Specific Commitments GATS/SC/65, 15 April 1994 
Exceptions to Article II (MFN) GATS/EL/65, 15 April 1994 
Communication of conditional initial offer on Financial services  S/FIN/W/12/Add.22, 15 October 1997 
Article III :3 S/C/N/69, 16 February 1998 
Article III: 4 S/ENQ/78/REV.1, 20 April 2001 
Agreement on Agriculture   
Supporting table relating to commitments on agricultural products  G/AG/AGST/Vol.2, 22 March 1995. 
Articles 10 and 18.2 G/AG/N/NGA/1, 16 February 1998 
Articles 10 and 18.2 G/AG/N/NGA/2, 16 February 1998 
Agreement on Textiles and Clothing  
Safeguard decision (Article 6.1) 
First integration and second integration G/TMB/N/187, 27 August 1996 
Agreement on Preshipment Inspection  
Laws, regulations and administrative procedures (Article 5) G/PSI/N/1/Add.7, 24 February 1998 
Table II.3 (cont'd) 
                                                      
17 GATT document Let/1957, 7 December 1994.  
18 According to members of the Organized Priv ate Sector, Nigerian businesses have a limited 
understanding of the text of the WTO Agreements and are thereby limited in their ability to take advantage of the opportunities under the multilateral trading system.  WT/TPR/S/147 Trade Policy Review 
Page 20 
 
 
Agreement and notification required Documents and notifications received  
Agreement on Implementation of Article VII of the GATT (Customs valuation)  
Delayed application (Article 5.2, 20.1 and 20.2):  WT/Let/106, 20 August 1996. 
Agreement on Import Licensing Procedure  
Absence of an import licensing regi me G/LIC/N/2/NGA/1, 25 July 1996. 
Article 7.3 G/LIC/N/3/NGA/2, 16 February 1998 
Article 1.4 G/LIC/N/1/NGA/1, 16 February 1998 
Agreement on Implementation of Article VI of GATT (Article 16.5) G/ADP/N/14/ADD.17, 12 August 2003 
Agreement on Subsidies and Countervailing Measures G/SCM/N/16/NGA, 16 February 1998 
Article 25.2 G/SCM/N/ADD.17, 12 August 2003 
Agreement on Safeguards (Article 12.7) G/SG/N/2/NGA/SUPPL.1, 18 January 2001 
Laws, regulations and administrative procedures (Article 12.6) G/SG/N/1/NGA/1, 25 July 1996. 
Agreement on Technical Barriers to Trade  
National enquiry point G/TBT/ENQ/S, 29 April 1996 
Acceptance of Code (Annex III (C)) .. 
Agreement on Trade-Related Investment Measures (Article 5.1) G/TRIMS/N/1/NGA/1/ADD.1, 16 February 2001 
Agreement on Trade-Related Aspects of Intellectual Property Rights IP/N/1/NGA/1, 17 September 1996. 
Article 63.2 IP/N/6/NGA/1, 19 November 2001 
Understanding on the Implementation of Article XVII  
Annual state trading activ ities 1995, 1996, 1997 (Ar ticle XVII.4(a)) G/STR/N/ 1/NGA, 19 Febr uary 1998 
Decision on Notification Procedures for Quantitative Restrictions (G/L/59) .. 
Understanding on Balance-of-Payments Provisions of GATT 1994 WT/BOP/N/45, 24 February 1999 
.. Not available 
Source: WTO documents. 
(ii) Regional agreements 
26. Nigeria's foreign policy remains focused on Afri ca.  On the economic front, this translates 
into supporting regional integration efforts.  Since the return to democracy in 1999, this policy focus 
has been given further impetus.  For instance, the new administration established a Ministry of 
Co-operation and Integration in Africa in July 1999.  This Ministry serves as the focal point in Nigeria 
for initiation, promotion, and acceleration of strate gies and policies for regional economic integration 
in Africa. Since its last TPR, Nigeria has been active in promoting both regional and subregional 
economic integration.  
(a) African Economic Community and the African Union 27. Nigeria is a member of the African Economic  Community (AEC), which was established by 
the Abuja Treaty in June 1991. The treaty provides for the creation of an African Common Market in six stages over a 34-year period. A key aspect of this integration process is the coordination and 
harmonization of tariff and non-tariff measures, am ong various subregional trade groupings (referred 
to as regional economic groupings), in order to create a continental customs union.  The AEC was established under the Organization of African Unit y (OAU), which was succeeded by the African 
Union (AU).  
28. The Constitutive Act of the AU was adopted in Lo mé in July 2000.  The AU was established 
with a view to, inter alia,  accelerating the process of regional integration, in order to enable Africa to 
play its "rightful role" in the global economy, wh ile addressing other forms of social, economic, and 
political problems on the continent.  The AU is larg ely being structured on the model of the European 
Union.  It would comprise a Council of Ministers, Commission, Parliament, Central Bank, Monetary Fund, Court of Justice, and a Security Council similar to that of the UN.  
29. One of the major initiatives under the AU is th e New Partnership for African Development 
(NEPAD).  The goals of NEPAD are to halt the marginalization of Africa in the globalization process; 
to eradicate wide-spread and severe poverty; and to promote accelerated growth and sustainable Nigeria WT/TPR/S/147 
 Page 21 
 
 
development.  Trade and trade -related measures outlined under NEP AD to promote African exports 
include: promotion and improvement of regional trad e agreements;  inter-regional trade liberalization; 
harmonization of tariffs, rules of origin, and product standards; reduction of export taxes, and of costs 
of transactions and operations; and promotion of African exporting and importing companies.  
NEPAD also aims to ensure active participati on of African countries in the multilateral trading 
system. In that respect, its plan supports the view  that multilateral trade negotiations must take into 
account Africa's special concerns. In addition, Afri can States are encouraged to tackle supply-side 
impediments to export production;  diversify exports; give the necessary political impetus to deepen 
the various integration initiatives on the continent; and secure and stabilize preferential treatment by 
key developed country partners.  
30. Nigeria has been playing an activ e role in pursuing NEPAD:  it w as instrumental in its design 
and is the current Chair of the Heads of States' Steering & Implementation Committee, and the Capital 
Flows Initiative Committee; the latter is tasked with raising the required capital of up to US$64 billion 
a year.  A NEPAD office has been established in Nige ria and has so far been active in educating both 
the private sector and civil society on NEPAD.19  Since the regional economic communities were 
appointed as the implementation agencies for NEPAD at the regional level, Nigeria has also been 
working closely with the Economic Community of West African States (ECOWAS) secretariat.  
(b) Economic Community of West African States (ECOWAS) 
31. Nigeria's regional integration efforts are carried  out mainly in the West African subregion 
through ECOWAS.  The Treaty establishing ECOWAS was signed on 28 May 1975 with Nigeria as 
one of its founding members.20  ECOWAS' mission is to promote cooperation and integration within 
the West African subregion through:  the remova l of customs duties and taxes having equivalent 
effect;  establishment of a common external tariff;  harmonization of economic and financial policies; 
and creation of a single monetary zone.  In 1993, its  treaty was revised to accelerate the process of 
integration.21  The institutions of ECOWAS are the Authority of Heads of States and Government, 
Council of Ministers, Community Parliament, Eco nomic and Social Council, Community Court of 
Justice, and Executive Secretariat. 
32. In the area of trade, ECOWAS members, includi ng Nigeria, have been implementing a trade 
liberalization scheme (TLS) since 1990, with th e objective of establishing a free-trade area by 
removing all barriers on all goods traded between member States by 1 January 2000.  A common 
external tariff (CET) was to be accepted by 1 Janua ry 2004 to finalize the establishment of a Customs 
Union.  However, the timetables for the implemen tation of the TLS and adoptio n of the CET have not 
been respected.22  As of December 2004, the free-trade area  component was being implemented fully 
by only seven of the fifteen members (i.e. Benin,  Burkina Faso, Côte d' Ivoire, Ghana, Guinea, 
Senegal, and Togo).  Nigeria has lagged behind in the regional integration efforts:  as of December 
2004, it had only removed tariffs applying to  unprocessed goods, but had maintained import 
                                                      
19 Further details available online at: www.nepad.org.ng.  
20 The other members of ECOWAS are: Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, The Gambia, 
Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone, and Togo.  
21 The revised treaty seeks to accelerate the process of integration through the introduction of the 
principle of supranationality in the application of decision s;  establishment of supranational institutions (such as 
the Community Court of Justice, Parliament, Economic an d Social Council) to monitor application of decisions 
and arbitrate as necessary; extension of scope of Community programmes, such as harmonization of economic 
and financial policies to other areas, and introduction of a Community levy/tax on goods from third countries to generate resources for financing regional integration. 
22 The initial deadline for the establishment of the customs union was 1 January 2002;  however this 
was postponed due to poor progress in adopting the CET.  Free trade in services is al so an objective, but the 
liberalization process is yet to start.  WT/TPR/S/147 Trade Policy Review 
Page 22 
 
 
prohibitions on some products, including those orig inating from ECOWAS member States.  Due to 
implementation delays, adoption of the CET has been  rescheduled to start on 1 January 2005 and be 
completed by 1 January 2008.  The ECOWAS CET, agreed on by member States, consists of four bands (0%, 5%, 10%, and 20%) similar to those al ready being applied by WAEMU member States.
23  
During the transition period (2005-07), non-WAEMU ECOWAS countries should therefore gradually 
align their tariffs on the WAEMU CET.  Nigeria has expressed its commitment to fully adopt the CET by the agreed date;  the authorities have indicated that, by June 2005, the ECOWAS CET is to apply 
to all products with the exception of some selected finished goods, including all those on the import 
ban list, scheduled to be phased into th e new tariff regime as from January 2007.
24 
33. In spite of all the measures taken to integr ate their economies, the level of intra-ECOWAS 
trade is very low (only 11% of extra-ECOWAS tr ade).  On average, ECOWAS member states trade 
some nine times more with non-ECOWAS countries than with other ECOWAS members.  For instance, in 2000, only about 6% of Nigeria's expor ts (mainly oil) were to ECOWAS member states 
(mainly Côte d'Ivoire and Ghana) and less than 2%  of its imports originated from ECOWAS member 
states (mainly Benin, Côte d'Ivoire, and Ghana).  This low level of subregional integration can be 
attributed to, inter alia , the low degree of implementation of the TLS due to cumbersome procedures 
in meeting rules of origin criteria, and to the po or design and under-financi ng of a fiscal compensation 
mechanism intended to support the regional integra tion process.  Furthermore, significant hindrances 
result from several non-tariff barriers to intra-EC OWAS trade such as bureaucracy, corruption in 
customs, slow port operations, poor roads and communications infrastructure between countries, 
wastage and theft at ports, poor storage conditi ons, harassment by police and other personnel at 
innumerable road blocks, and inter-country payment difficulties.
25  In Nigeria for instance, an OECD 
study reports that in the port of Lagos, as well as other border posts, forwarding costs can vary by 
100% for the same product depending on the rela tionship between the operator and the customs 
officials, forwarding agents, and security forces.   Addressing these problems would increase intra-
regional competition and trade flows, and make the subregion more attractive to inflows of domestic 
market-seeking foreign investment. Given Nigeria's size in ECOWAS (60% of the population, 47% of 
GDP, over 50% of manufacturing potential), it has a pivotal role to play in the subregion's integration efforts:  its return to democracy and renewed inter est in integration have helped to further stimulate 
economic integration in the subregion. 
34. In a bid to further accelerate subregional integr ation, Nigeria and six other ECOWAS member 
states (Benin, Burkina Faso, Ghana, Mali, Nige r, and Togo) are engaged in a free trade area 
programme, which was launched in 2002.  The programme seeks to, inter alia , remove all physical 
and non-physical trade barriers (including remain ing tariffs); eradicate rigid border formalities; 
enforce the application of ECOWAS prescribed customs procedures; and adopt a common ECOWAS 
passport.  The FTA is expected to develop into a customs union with the adoption of a CET by 2007.  
35. Efforts towards monetary integration in th e subregion have been taking place under the 
ECOWAS Monetary Co-operation Programme (EMCP)  adopted in 1987.  The programme was aimed 
at improving and strengthening subregional payments under the West African Clearing House (now West African Monetary Agency);  introducing limited currency convertibility;  and establishing a 
single monetary zone, and eventually a common centr al bank and single currency by 2000.  However, 
due to slow implementation, the single monetary  union (single currency and central bank) was not 
realized by 2000.  Hence, a two track approach w as adopted to accelerate the process.  The first phase 
involved the creation of a second monetary zone, the West African Monetary Zone (WAMZ), 
                                                     
 
23 The categorization of products under each tariff ba nd has not yet been agreed by ECOWAS member 
states. 
24 2005 Budget Speech, October 12, 2004.  
25 World Bank (2001), and OECD (2000). Nigeria WT/TPR/S/147 
 Page 23 
 
 
amongst non-WAEMU ECOWAS members, including Nigeria, by 200326;  the second phase involved  
the merger of the two subregional monetary zon es, with a common central bank and currency by 
2004.  Certain convergence criteria are expected to be adhered to before the creation of WAMZ.  The 
primary criteria include:  an inflation rate of 5% or  lower; gross foreign exchange reserves equivalent 
to at least six months of imports;  central bank fi nancing of public deficit not to exceed 10% of the 
previous year's tax revenue;  and the ratio of pub lic deficit to GDP (excluding foreign grants) not in 
excess of 4%.  A number of secondary criteria are al so in place.  Though some efforts have been 
made, progress towards the secondary monetary zone has been hampered by the inability of countries 
to meet the convergence criteria:  Nigeria did not meet all the primary convergence criteria in 2003.  
This slow progress has necessitated the postponement  of the creation of the second monetary zone 
from January 2003 to June 2005.  
36. ECOWAS is engaged in a number of other trade facilitating projects including roads and 
telecommunication infrastructure; the creation of an ECOWAS brown card insurance scheme27;  the 
establishment of an inter-state road transit scheme;  the abolition of visa requirements for all countries 
in the subregion;  environmental programmes;  and regional peace and security programmes.28  
ECOWAS is also one of the regional economic communities identified as an implementing agency 
under NEPAD;  in this respect, an action plan w as approved in 2002.  Furthermore, under the EC's 
Economic Partnership Agreements (EPAs) with AC P States, it is involved in the negotiation of a 
West Africa EPA with the EC. 
(iii) Other trade agreements 
37. Nigeria is eligible for non-reciprocal trade preferences under the GSP schemes of several 
developed countries; the Cotonou Agreement with th e European Communities;  and the United States' 
African Growth and Opportunity Act.  Nonetheless, utilization of these opportunities remains low, in particular with regard to non-petroleum exports.  
38. Recent studies have attributed the under-performance of non-reciprocal preferential trade 
arrangements schemes to a host of external factors.   They are observed to exclude, or include on a 
limited basis, products in which developing c ountries have the greatest comparative advantages 
(agricultural goods (processed products in particular),  textiles, clothing and footwear), and face MFN 
tariff peaks.  Burdensome rules of  origin (e.g. a high value-added criterion) could serve as a deterrent 
to small countries with limited technological cap acity, and may pose problems in meeting the 
documentation requirements
29;  and stringent standards and tec hnical regulations may add to these 
difficulties.  In addition, these preferences may be considered uncertain because they can be 
unilaterally revoked or modified, and the provisions for graduating countries out of particular sectors 
could weaken the incentive for large-scale investment in the activities concerned.  The uncertainty is 
increased by the inclusion of various non-trade (po litical, labour, social, and environmental) concerns 
as conditions for accessing all or certain aspects of th e available preferences.  Furthermore, even 
without these constraints, liberalization of pref erential markets (including through the increasing 
number of regional trade agreements) continues to erode existing preferences.30 
                                                      
26 The Francophone ECOWAS member states, which already shared a common currency (the CFA 
franc), formed the West African Economic and Monetary Union (WAEMU). 
27 Third-party motor vehicle cover. 
28 Information available online at:  http ://www.sec.ecowas.int/[27 August 2004]. 
29 The inability of developing countries to fully utilize the opportunities provided by non-reciprocal 
preferential trade arrangements is partly due to stringent rules of origin requirements, which are costly to meet 
in terms of documentation and the technological capac ity needed to meet the value-added requirements 
(Brenton, 2003). 
30 Brenton (2003) and Panagariya (2002). WT/TPR/S/147 Trade Policy Review 
Page 24 
 
 
39. Domestic development challenges could also sev erely limit the ability of developing countries 
to exploit these opportunities.  For instance, in Ni geria, the competitiveness of the exportable sector is 
hindered by high transaction costs resulting from poor infrastructure, bureaucracy, corruption, 
unstable macroeconomic environment, lack of access to credit, as well as other supply-side constraints 
(section (4)) and Chapter IV (3)(iii) and IV(5)(iii)).  Exports are also discouraged in some sectors by 
anti-export biases resulting from the tariff structure, export taxes, and bans (Chapter III(2)(iii), (3)(ii) 
and (3)(iii))).  Furthermore, exporters lack adequate  specialized support institutions and in some cases 
are unaware of the opportunities available to them under the preferential trade arrangement schemes.  
(a) Cotonou Agreement 
40. Nigeria is a signatory to the Cotonou Ag reement (successor to the Lomé Convention) 
between the European Communities (EC) and 78 A frican, Caribbean and Pacific (ACP) countries, 
which was signed on 23 June 2000 and entered into force in April 2003.31  The agreement builds upon 
three interlinked pillars:  a political dimension; development and finance cooperation; and economic 
and trade cooperation.  Under the latter, ACP countries, except for South Africa32, benefit from non-
reciprocal trade preferences during an interim period (2001-07).33 These include duty-free treatment 
on industrial, processed agricultural, and fishery pro ducts, subject to a safeguard clause.  For certain 
products (bananas, beef and veal, and sugar),  the EC provides special market access under 
"commodity protocols".  The preferential rul es of origin contain product-specific requirements34, and 
allow for regional cumulation.  At the end of th e interim period (31 December 2007 at the latest), 
these unilateral preferences will be replaced by WT O-compatible reciprocal economic partnership 
agreements (EPAs) between the EC and indi vidual ACP countries or groups of countries. 
41. The primary objectives of the EPAs are to foster  sustainable development, integrate the ACP 
states into the world economy and fully comply with  the prevailing WTO rules.  The basic guiding 
principle for EPAs is to build on and reinforce ACP regional integration processes, and provide for 
appropriate differentiation and asymmetry to take  account of the level of development and their 
socio-economic impact on ACP countries.  EPAs will provide for the progressive elimination of 
tariffs and non-tariff measures between the parties, on both goods and services, and are expected to 
address other trade-related issues.35  Development concerns will be reflected through flexibility 
vis-à-vis depth of liberalization, its asymmetry, length of transition periods, trade coverage and 
exceptions, and through assistance from the EC. 
42. Formally, all EPA negotiations started in Septem ber 2002 to define the format, structure, and 
principles for the negotiations, and horizontal issues of in terests to all parties.  Nigeria is participating 
in the EPA negotiations as a member of the group of  West African Trade Ministers.  In August 2004, 
the West African Trade Ministers and the EC adopted  the road map for the ne gotiations agreed to at 
                                                      
31 The ACP states comprise of 48 A frican states, covering all of sub- Saharan Africa, 15 states in the 
Caribbean, and 15 states in the Pacific (the Democr atic Republic of East Ti mor acceded to the Cotonou 
Agreement in May 2003). 
32 South Africa is a signatory to the Cotonou Agr eement but its membership of the ACP Group is 
qualified (Protocol 3 on South Africa attached to the Cotonou Agreement).  The Trade, Development and Co-
operation Agreement (TDCA) between the EC and South A frica takes precedence over  the Cotonou Agreement. 
33 The Agreement is currently under a WTO waiver th at was approved at the Doha Ministerial Meeting 
and expires on 31 December 2007 (see WTO docum ent WT/MIN(01)/15 of 14 November 2001). 
34 The requirements relate to maximum import content, specific processing criteria, and change in tariff 
headings. 
35 These may include sanitary and phytosanitary measures, intellectual property rights, public 
procurement, competition policy, investment, trade and environment, trade and labour standards, consumer 
policy regulation and consumer health protection, st andardization and certification, and food security. Nigeria WT/TPR/S/147 
 Page 25 
 
 
the technical level.  This includes deepening regional integration in West Africa, improving 
competitiveness, and capacity building for the pr eparation and conduct of the negotiations.36 
43. Nigeria's exports to the EC consist of petroleum oils (75.9% of the  total in 2003);  petroleum 
gas (11.4%);  and agricultural products (8%), ma inly cocoa beans (6%).  Most of these products 
already enter the EC duty-free on an MFN basis.  Nigeria's imports from the EC in 2003 consisted 
mainly of embroidered tex tile fabrics (28.4%);  frozen fish (17.2% );  milk and cream products (9.5%);  
tobacco and tobacco products (5.6%);  malt extract and food preparations (4.5%);  and electricity 
generating sets and rotary converters (4.0%). 
(b) African Growth and Opportunity Act (AGOA) 
44. Nigeria is eligible for various trade prefer ences under the United St ates' AGOA.  The AGOA 
is contained in the U.S. Trade and Deve lopment Act 2000, as amended up to June 2004.37  T h e  
AGOA extends the product coverage of the U.S. Ge neralized System of Preference scheme, but only 
to African countries.  Under the AGOA, eligible  countries qualify for duty-free and quota-free access 
to the US market (except for "wearing apparel" pr oducts) for a range of products, including selected 
agricultural and textile  products until 2015.38  To be eligible, African countries must make progress 
in:  establishing a market-based economy;  developing the rule of law and political pluralism; 
eliminating discriminatory barriers to U.S. trade and investment; protecting intellectual property; 
combating corruption; protecting human and worker rights;  and removing certain practices of child 
labour.39  AGOA eligibility does not automatically imply eligibility for the "wearing apparel" 
provisions;  these are governed by a separate set of conditions and associated rules of origin.40  To 
export apparel (and certain textile items) to the United States duty-free under the AGOA, countries 
must implement a "visa system" that ensures complia nce with the required rules of origin. Nigeria was 
declared eligible for the preferences unde r the apparel provisions in July 2004.  
45. In 2003, Nigeria's exports and imports bilatera l trade with the United States amounted to 
US$10 billion for exports and US$996 million for imports.  Nigeria is the leading country in terms of 
value of exports under AGOA;  in 2003, Nigeria c ontributed some 52% of the US$18 billion of total 
U.S. imports from countries eligible for AGOA (incl uding GSP).  However, Nigeria's exports to the 
U.S. are highly undiversified; in 2003, energy-re lated products accounted for about 93% of the total 
and all of its exports under the AGOA were energy-related products.41 
46. Measures implemented in order to better utilize the opportunities under the AGOA include:  
concessionary import duties of 2.5% on industrial equipment used to produce AGOA exports, and the 
establishment of AGOA-dedicated desks at the country's ports.  Nigeria's imports from the 
United States in 2003 consisted mainly of agri cultural products (32.6%), transportation equipment 
(28.7%), electronic products (13.4%), machinery (9.5%), and chemical and related products (6%).  
                                                      
36 EPA Newsletter No. 4.  Available at:  http://europa.eu.int/comm/trade/issues/bilateral/ 
regions/acp/newsletter.htm;  and Trade Negotiations Insight , "EPA Negotiations Update", Volume 3 No.5. 2004 
[9 February 2005]. 
37 The AGOA was revised in November 2003. 
38 The AGOA was due to expire in 2008 until its amendment in 2004.  
39 African Growth and Opportunity Act.   Available at: http://www.agoa.gov/ 
index.html [27 August 2004]. 
40 Under the recent AGOA amendments, the waiver from the normal rules of origin for wearing 
apparel, as applicable to "Lesser Developed Beneficiary Countries", has been extended from September 2004 to 
September 2007. 
 41 African Growth and Opportunity Act.  Available at:  http://www.agoa.info/ 
index.php?view=trade_stats&story=agoa_trade.