Nigeria WT/TPR/S/247 
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IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE , FISHING AND FORESTRY  
(i) Agriculture 
(a) Agriculture situation 
1. Agriculture is critical to the economy in Nige ria.  In 2009, agriculture (crop and livestock 
production) contributed 41.7% to GDP and represente d over half of all employment.  Agriculture's 
share of GDP has been steady in real terms over th e past few years reflecting strong growth in output 
that averaged 6.7% in real te rms in the 2004 to 2009 period.1  Although improving, production and 
productivity remain well below their potential levels .  Out of a total land area of about 91 million 
hectares about 78 million hectares are suitable for farmi ng but less than half of this is being exploited 
and less than 1% is irrigated even though up to  7% of farm land is suitable for irrigation.2  However, 
soil quality is nearly all medium to poor and some  areas are degraded from over-grazing and erosion.3  
2. Agricultural production continues to be dominated  by small holders with  about 80% of farms 
being less than 6 ha and only 5% larger than 10 ha .  Crop production makes up nearly all the value of 
agricultural production, and Nigeria is a major producer  of several crops, accoun ting for over half of 
world production of yams and cowpeas and significant proportions of cashew nuts, cassava, cocoa 
beans, millet, and sorghum (see Table IV.1).  Pr oduction depends on climate, topography, and soil.  
Roughly speaking, cassava production is grown in the south and centre then, moving north, yams and 
maize, and then the more drought tolerant sorghum and millet. 
3. About two-thirds of total agricultural production is subsistence farming by smallholders using 
traditional rotational fallow farming with surplus pr oduction traded on local markets.  The main cash 
crops, grown on the larger farms, are palm kernel s, cotton, cocoa, rubber, and groundnuts.  Most 
production uses simple methods with few implements and low levels of inputs.  According to some 
estimates, there are only about 40,000 tractors in Ni geria, of which only about half are operational.4  
Despite the low intensity of agricultural producti on, output has been increasing since the late 1980s 
(with large annual variations) and pa rticularly over the past ten years or so as it has benefited from 
better prices, a more stable policy enviro nment and the revaluation of the naira. 
4. The livestock sector is much smaller than the crop sector and, in 2009 , represented about 7% 
of total agricultural production although it is also experiencing a similar rate of growth in the real 
value of output, at over 7% per year since 2004.  Ho wever, livestock farming also plays an important 
role that goes beyond providing meat and animal products, as animals also provide manure, fuel, 
transport, and farm energy.  It has also been noted  that livestock farming is the most efficient use of 
uncultivated land and animals can be fed on crop r esidues such as damaged fruit and grains as well as 
straw that would otherwise be wasted.5   
                                                      
1 Central Bank of Nigeria (2010), pp. 246-247. 
2 IFAD online information, "Rural poverty in Nigeria, Agriculture in the Federal Republic of Nigeria".  
Viewed at at:  http://www.ruralpovertyportal.org/web /guest/country/home/tags/nigeria [November 2010]. 
3 Aregheore (2005). 
4 Central Bank of Nigeria (2009), p. 88. 
5 Ojiako and Olayode (2008). WT/TPR/S/247 Trade Policy Review 
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Table IV.1 
Production of selected crops, 2003-08 
('000 tonnes) 
 2003 2004 2005 2006 2007 2008 % of 2008 
world 
production 
Cashew nuts, with shell 524  555  594  636  660  660  17.5 
Cassava 36,304  38,845  41,565  45,721  43,410  44,582  19.2 
Cocoa beans 385  412  441  485  500  500  11.7 
Cowpeas, dry 2,459  2,631  2,815  3,040  2,800  2,916  50.8 
Groundnuts, with shell 3,037  3,250  3,478  3,825  3,835  3,900  10.2 
Maize 5,203  5,567  5,957  7,100  6,724  7,525  0.9 
Millet 6,260  6,699  7,168  7,705  8,090  9,064  25.7 
Oil palm fruit 8,632  8,700  8,500  8,300  8,500  8,500  4.1 
Plantains 2,263  2,421  2,591  2,785  2,991  2,727  7.9 
Potatoes 678  726  776  838  662  1,105  0.3 
Rice, paddy 3,116  3,334  3,567  4,042  3,186  4,179  0.6 
Sesame seed 80  78  100  100  105  110  3.1 
Sorghum 8,016  8,578  9,178  9,866  9,058  9,318  13.9 
Yams 29,697  31,776  34,000  36,720  31,136  35,017  66.0 
Note: FAOStat production data differ from the National Bureau of Statistics data, but are used in this table to show Nigerian p roduction 
compared to total world production of the selected crops.   
Source:  FAOStat (accessed November 2010). 
5. Within the livestock sector, production has been  increasing steadily for some years for all 
types of meat, with the exception of beef, which increased particularly quickly in the early 1980s before falling sharply in the late 1980s, mainly due  to rinderpest, and has been recovering slowly 
since then (Table IV.2). 
Table IV.2 
Livestock production, 2003-08 
(tonnes) 
 2003 2004 2005 2006 2007 2008 
Cattle meat 279,500  280,000  260,850  284,050  287,450  293,800  
Chicken meat 201,000  211,000  218,750  232,100  243,300  243,250  
Cow milk, whole, fresh 408,700  423,000  438,500  462,700  468,240  469,250  
Goat meat 245,372  251,841  256,745  264,317  270,742  270,742  
Pig meat 178,875  186,165  193,455  201,285  209,250  217,602  
Sheep meat 131,270  134,332  137,301  141,437  144,721  145,321  
Source:  FAOStat (accessed November 2010). 
6. Like crop production, livestock production is  based on traditional methods including 
pastoralism and seasonal tethering with cut-and-carry  of fodder to the tethered animal.  Overgrazing 
of pastoral lands is increasingly a problem in some parts of Nigeria and the pastoral system means it is difficult to improve grazing methods or to in troduce new grass species or other fodder crops. 
7. Nigeria's climate and geographic location along with the pastoral method of raising livestock 
and resource constraints for veterinary services, me an that a number of diseases, such as foot and 
mouth disease, peste des petits ruminants and inf ectious bursal disease, are endemic.  However, 
Nigeria has had some success in controlling and eliminating diseases, such as rinderpest, which was last reported in 1987, and bovine tuberculosis a nd brucellosis, which were last reported in 2008.
6 
                                                      
6 OIE online information.  Viewed at:  http://www.oie.int/wahis/public.php [November 2010]. Nigeria WT/TPR/S/247 
 Page 45 
 
 
8. Although production has increased considerably ov er the past few years the challenges facing 
agriculture in Nigeria are considerable.  The small si ze of farms, the low levels of mechanization and 
input use, poor infrastructure and many other problems need to be addressed, not least of which is the 
high level of post-harvest losses due to pests, anim als, and poor transport and storage conditions.   
(b) Trade in agriculture 
9. Nigeria is a net importer of agricultural goods.  Its main exports of agricultural products 
(WTO definition) are cocoa beans and products th ereof, sesame seeds, gum arabic, cigarettes, cut 
flowers, and cotton.  Regardless of the data source or the definition used, there has been a dramatic 
increase in agricultural exports over the past  few years, from US$8 million in 2003 to 
US$2,225 million in 2008 (Comtrade, WTO definiti on) as traditional exports increased dramatically 
and were joined by many new exports, such as fre sh fruits and vegetables, nuts, spices, and sesame 
seeds.  
10. Despite the rapid growth in agricultural exports and the increase in th e variety of exports, 
Nigeria's exports are still concentrated in a narrow range  of products.  In 2009, ov er half of all exports 
of agricultural products were cocoa beans, while exports of cocoa butter and cocoa shells made up 
another 8% of the value of agricultural exports.  In  2009, the top ten exports (at HS six-digit level) 
made up 93% of total agricultural exports (Table IV.3). 
Table IV.3 
Exports of agricultural products, 2003, 2006-09 
(US$ million) 
HS 
Code Commodity description 2003 2006 2007 2008 2009 
180100 Cocoa beans, whole/broken, raw/roasted 0.01  5.04  377.32  510.31  1,250.87  
120740 Sesamum seeds, whether/not broken .. 2.62  118.24  151.30  194.39  
130120 Gum arabic 0.02  188.87  57.95  64.05  165.99  
180400 Cocoa butter, fat & oil .. 3.62  67.88  76.08  152.46  
240220 Cigarettes containing tob acco .. .. 34.93  54.66  96.35  
060390 Cut flowers & flower buds of a kind suitable for 
bouquets/ornamental purposes, 
dried/dyed/bleached/impregna ted/otherwise prepared .. .. 1.77  9.62  66.07  
520100 Cotton, not carded/combed 0.28  0.39  46.98  71.96  62.28  
080131 Cashew nuts, in shell 0.03  .. 26.59  38.80  35.14  
180200 Cocoa shells, husks, skins & other cocoa waste .. .. 1.09  9.43  21.95  
230230 Bran, sharps & other residues, whether/not in the form of 
pellets, derived from the sifting/milling/other working of wheat .. 0.24  14.62  19.61  20.67  
080122 Brazil nuts, shelled .. 3.75  12.59  6.38  20.05  
220300 Beer made from malt .. 0.22  11.10  15.13  19.55  
 Total exports of agricultural products  7.57  221.84  942.95  1,139.67  2,225.61  
.. Not available. 
Note: Data for 2004 and 2005 are not available. 
Source:  UN Comtrade. 
11. Based on data from importing countries, the main  destination for exports for cocoa and its 
products is the EU, which takes about 88% of Nigeri a's exports.  Other exports are also concentrated, 
but to different markets, with about half of Nigeri a's exports of sesame seeds and gum arabic going to 
Turkey and India respectively. WT/TPR/S/247 Trade Policy Review 
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12. Although exports of agriculture products have incr eased dramatically over the past few years, 
Nigeria remains a net-importer of agricultural prod ucts.  The value of imports increased sharply from 
2003 to 2007 but fell back in 2008 as world prices declined from the peaks of late 2007 and early 
2008 (Table IV.4).  Wheat, milled rice, raw cane s ugar and whole milk powde r make up over half of 
all imports but, in general, imports are more widely spread across different tariff lines than are 
exports.  Nearly all wheat imports come from th e United States, milled rice from Thailand, raw cane 
sugar from Brazil, and milk powder from the EU. 
Table IV.4 
Imports of agricultural products, 2003, 2006-09 
(US$ million) 
 Commodity description 2003 2006 2007 2008 2009 
100190 Wheat other than durum wheat; meslin 388.34 1,279.03 1,827.60  628.93  1,059.78 
100630 Semi-milled/wholly milled rice, whether/not 
polished/glazed 230.17 370.70 394.53  85.21  355.45 
170111 Cane sugar, raw, in solid form  23.26 45.45 228.35  39.98  282.78 
040221 Milk in powder/...unsweet ened, fat content by weight 
>1.5% 70.23 302.24 520.33  220.48  168.46 
190190 Malt extract  71.53 182.42 289.92  136.08  143.48 
210690 Food preparations, n.e.s. 32.00 49.87 79.66  56.33  98.94 
100640 Broken rice 0.90 45.76 82.04  6.96  88.88 
151710 Margarine (excl. liquid margarine) 1.50 7.48 50.52  24.06  60.33 
170211 Lactose & lactose syrup,  0.45 0.94 2.14  17.52  56.68 
210390 Sauces & preparations therefore, n.e.s. 7.38 29.70 22.67  42.21  54.19 
 Total imports of agricultural products 1,950.16 3,488.01 5,636.56  2,284.69  3,444.11 
Note: Data for 2004 and 2005 are not available. 
Source: UN Comtrade. 
(c) Agriculture policy 
13. The basis for agricultural policy in Nigeria is the New Agricultural Policy Thrust of 
October 2001.7  The main objectives for agriculture are to increase production in order to become 
self-sufficient in basic foodstuffs and to provide  raw materials for manufacturing and products for 
export by improving productivity and increasing employ ment in agriculture.  Better productivity is to 
be achieved through improved seeds and livestock, be tter farming equipment, and extension services 
to give producers the necessary technical support.   
14. Under the Policy, the Federal Government's  responsibilities include the macroeconomic 
framework and trade policies within which agricu lture operates, large-scale infrastructure projects 
(roads, dams, canals, etc.), providing funding for agriculture and rural development, and technical 
support such as research, pest and disease control, and statistical services.  The state governments' 
responsibilities include extension services, maintena nce of irrigation and watering facilities, and 
promotion of input industries and local credit in stitutions.  Local governments' responsibilities have 
been expanded under the Policy to include the pr ovision of land for new entrants, promotion of 
cooperative societies for producers, and management of infrastructure.   Under the Land Use Decree of 
1978, each state government owns all land within the St ate.  User rights for urban land are granted by 
the State Governor while user rights for rural land are granted by local governments.   
                                                      
7 Federal Ministry of Agriculture and Rural Development (2001). Nigeria WT/TPR/S/247 
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Domestic support 
15. Based on its notifications to the Committee on Agriculture, Nigeria did not provide any 
domestic support or export subsidies to  agriculture in the 1995-2009 period.8  However, according to 
the Central Bank, in 2009:  the Federal Governme nt's current expenditure on agriculture (including 
fisheries and forestry) was N 22.4 billion and its capital expenditure was N 139 billion;  and state 
governments' current and capital e xpenditure on agriculture was N 59.3 billion (Table IV.5).9  
Although public spending on agriculture has been in creasing over the past few years, it still represents 
only about 4% of agriculture contribution to GDP.   
Table IV.5 
Federal Government and st ate governments' expenditure on agriculture, 2005 and 2006-09 
(N billion) 
 2005 2006 2007 2008 2009 
Federal Government expenditure      
 Recurrent spending on agriculture 16.3 17.9 32.5 65.4 22.4 
 Capital spending on agriculture and natural resources 60.3 89.5 94.1 106.0 138.9 
State governments expenditure      
 Recurrent and capital spending on agriculture  24.2 27.8 30.8 44.3 59.3 
Source: Central Bank of Nigeria (2010), Annual Report 2009 . 
16. In addition to budgeted expenditu re on agriculture, it has also been reported that there is 
considerable off-budget funding applied.  Howe ver, reliable data on o ff-budget spending and on 
external aid to agriculture are "extremely difficult to obtain".10 
17. Until 2008, current expenditure by the Fe deral Government was focussed on three 
programmes:  procurement and distribution of fe rtilizer;  the National Special Program for Food 
Security (NSPFS);  and the buyer-of-last-resort grain purchase.  These thr ee programmes represented 
43%, 22% and 26% of current spending respectivel y.  Capital expenditure was focussed on the 
purchase of agricultural inputs and outputs.11 
18. For many years now, fertilizer has been subsid ized with rates varying from one year to the 
next.  Under the Federal Market Stabilization Progr am (FMSP), companies offer to produce or import 
fertilizer and distribute it with a 25% subsidy to th e state governments, which can, in turn, add to the 
subsidy.  Spending by the Federal Government on the fertilizer subsidy varies widely from one year to 
another (N 1.8 billion in 2005 to about N 11 billion in 2009).12  In 2010, the Federal Government 
provided N 22.3 billion for the FMSP.13  The state governments can also acquire fertilizer outside of 
the FMSP for sale to farmers.  The rate of subsid y provided by the states and the total quantity of 
subsidized fertilizer available varies from one State to another, but the amounts available are generally 
very small and in no State does the average farmer have enough fertilizer for one hectare.  A number 
of reasons have been put forward for the low use of  fertilizer, including:  unavailability at times of 
need;  poor quality; short weights;  and lack of informed advice from the extension services.14  
According to the authorities, a pilot scheme in  Kano and Taraba, where farmers received vouchers 
                                                      
8 WTO documents G/AG/N/NGA/1 to 12. 
9 Central Bank of Nigeria (2010), pp. 235, 236 and 238. 
10 IFPRI (2008b). 
11 IFPRI (2008b) and IFPRI (2008a). 
12 Fertilizer suppliers Association of Nigeria (2010). 
13 Federal Ministry of Agriculture and Rural Development, "2010 Ministerial Press Briefing",  
December, Abuja. 
14 IFPRI (2009). WT/TPR/S/247 Trade Policy Review 
Page 48 
 
 
that can be exchanged for fertilizer, is to be  extended nationwide with the assistance of the 
International Fertilizer Development Center.15 
19. The Special Programme for Food Security was launched in 2001 following a pilot programme 
in Kano State.  The objectives of the programme are to improve household and regional food security 
through improved access to extension services;  cred it facilities;  and education on health.  The 
programme, now referred to as the National Programme  for Agriculture and Food Security, is funded 
by the Federal Government and coordinated thro ugh the Project Coordination Unit in the Federal 
Ministry of Agriculture and Rural Development.  In 2003, a four-year cooperation agreement was 
signed by the FAO, China, and Nigeria under whic h the Federal Government provided funding and 
the Government of China provided technical experts.16  
20. The Buyer of Last Resort Grain Programme, ope rated by the Food Reserves Agency, had the 
primary objective of creating a buffer stock of grain to respond to shortages,  such as that caused by 
the high prices of late 2007 and early 2008 (Table IV.6).  Another objective was to support prices by 
purchasing grains whenever market prices fall below th e established price.  The Buyer of Last Resort 
Grain Programme has been replaced by the Guaranteed Minimum Price scheme. 
Table IV.6 
Procurements and releases from gov ernment stocks, selected years 
(tonnes) 
Product 1999/2000 
procurement 2001/2003 
release 2003/2004 
procurement 2005 release 2006/2007 
procurement 2008 release 
Maize 23,591 22,745 54,194 50,477 30,467 29,739 
Sorghum 18,066 17,919 28,013 25,002 39,226 35,391 
Millet 12,614 12,695 608 510 3,373 2,046 
Paddy rice 518 495 120 120 0 0 
Gari 0 0 660 523 445 31 
Source: Information provided by the  Federal Ministry of Agriculture  and Rural Development (2008).  
21. Since 2006, public support for agriculture has in creased considerably (Table IV.5 above) and 
a number of new programmes have been introduced.  These programmes include: 
 - the Rural Sector Enhancement Project for improving rural infrastructure such as 
roads, water supply, and telecommunications; 
 - Water and Aqua-culture Resource Mana gement Nigeria for local irrigation and 
drainage programmes; 
 - Maximising Agricultural Revenue in Key Enterprises for improving production, 
storage, processing and marketing of agricultural produce; 
 - provision of N 200 billion for agriculture credit schemes provided through the 
commercial banks for commercial farmer s and through the state governments for 
smaller farmers, of which about three quarters has been accessed; 
                                                      
15 Federal Ministry of Agriculture and Rural Development, "2010 Ministerial Press Briefing" , 
December, Abuja. 
16 FAO online information.  Viewed at:  http:// www.fao.org/spfs/national-programmes-spfs/success-
npfs/nigeria/en/ [December 2010];  and FAO (2009). Nigeria WT/TPR/S/247 
 Page 49 
 
 
 - a grain silo and warehouse building programme to improve storage facilities to 
increase storage capacity from 300,000 tonnes to  1,025,000 tonnes, with a budget of 
N47.7 billion in 2009 to build 20 new silos. 
 - the creation of 300  farm supplies shops across Nigeria by 2015 to provide inputs for 
farmers, including equipment (tractors, etc.).  In 2011, 18 shops had been built with a 
further 62 under construction at a cost of about N 70 million each; 
 - a pilot scheme to build livestock estates to  provide finishing feed lots, slaughter and 
processing centres for meat production;  and 
 - several other schemes most of which are focussed on improving extension services to 
farmers, and research and development progr ammes, as well as reducing post-harvest 
losses that currently account for a large portion of production.17 
Border measures 
22. In addition to programmes funded by public spe nding, agriculture policy in Nigeria continues 
to rely on trade measures, including a prohibition on imports of a range of products, including poultry 
and eggs, pork, beef, cassava, some  refined vegetable oils, cocoa butter, powder and cakes, spaghetti 
and noodles, packed fruit juice, and drinking waters.18  The list of products used to be considerably 
longer and, until end-2007, included flowers, fr esh and dried fruit, maize, wheat flour, crude 
vegetable oils, linseed oil, castor oil and olive oil, sugar confectionaries, biscuits, and beer.   
23. Changes to the list have had a considerable im pact on Nigerian manufacturing.  For example, 
the removal of crude vegetable oil, an ingredient in instant noodles, has led to an increase in noodle 
manufacturing using imported flour, despite the impo sition of a 35% tariff.  On the other hand, the 
removal of biscuits and wheat flour from the list of pr ohibited items and application of a tariff of 35% 
and 25% respectively, has not led to significant imports of either product.19   
24. In addition to having been on the import prohibition list, cassava production is supported 
through the requirement for flour mills to incl ude 5% cassava in wheat flour to support cassava 
producers.  In addition, in early 2009, a Preside ntial Technical Committee on Cassava was created to 
identify how to improve the competitiveness of cassava production but has yet to make any 
recommendations.   Cassava was taken off the Import Prohib ition List in December 2010 when the 
prohibition was replaced by a tariff of 20%.   
25. Maize and rice were also taken off the Import Prohi bition list at the end of 2007 and a tariff of 
109% applied to imports of husked rice and maize.   In September 2008, the tariff on husked brown 
rice was reduced to 5% based on a reference pr ice of US$640 per tonne, effectively applying a 
specific duty to rice of US$32 per tonne.  Although mai ze is mostly used for human consumption, it is 
also important for the brewing industry and as poultr y feed for the growing chicken-meat sector.  
Imports of maize remain low despite the increase  in consumption and the removal of the import 
prohibition.  A tariff of 35% is a pplied to imports of maize flour and a tariff of 10% plus an additional 
duty of 20% are charged on imports of semi- and whol ly-milled rice.  The official justification for the 
escalation of tariffs is to support domestic millers.  Maize is also subject to an export prohibition. 
                                                      
17 Ogbonnaya, R. (2010). 
18 Nigeria Customs Service online information:  http://www.customs.gov.ng/ProhibitionList/import.php 
[November 2010]. 
19 USDA Foreign Agricultural Service (2009).  WT/TPR/S/247 Trade Policy Review 
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26. Nigeria has 810 tariff lines for agricultural produc ts (WTO definition).  Tariffs are in four 
bands of 5%, 10%, 20% and 35%.  On average, tari ffs on agricultural products, which were at 15.6% 
in 2009, are higher than those on other products, whic h averaged 11.4% in that year.  In addition to 
tariffs, other duties and charges are applied to im ports of some products.  The charge varies from 
100% or 50% on some tobacco products, 30% on some alcohol products, 20% on rice and biscuits, 
and 10% on sugar.  In addition,  a 20% sugar levy is applied to tobacco and alcohol products.  
Value-added tax is also charged upon entry, at a ra te of 5% on wide range of alcohol products.   
27. Nigeria does not have tariff quotas.  Nor does it have export subsidies for agriculture products 
or export credits specifically for agriculture products. 
28. Overall, Nigeria's support to agriculture has been increasing over the past few years although 
it remains relatively low as a percentage of the va lue of production.  Most support is still provided 
through input subsidies, particul arly for fertilizer, and price support measures.  The price support 
measures are not confined to the Guaranteed Minimum Price.  They also include the import 
prohibitions and tariffs applied to imports.  Howeve r, with the exception of the Guaranteed Minimum 
Price, the policy focus of support is on increasing productivity through improved research and 
development and better extension services, which ar e more likely to have an impact on improving 
productivity in the long-run than price support measures.   
29. Despite the increase in productivity over the p ast few years and the rapid growth of the 
agriculture sector, farming in Nige ria continues to present several criti cal challenges.  Some of these 
are being addressed by current programmes, such as limited access to inputs, and high levels of post-
harvest losses.  Land tenure, which is currently vest ed in state governors, may also become a barrier 
to investment.  A legal bill to address land tenure has been prepared but h as yet to go before the 
National Assembly.   
(ii) Fishing 
(a) Fishing situation 
30. Fisheries in Nigeria is made up of offshore, coast al, and inland waters with capture fishing at 
the industrial and artisanal levels as well as aquaculture.  Fishing accounted for just over 1% of GDP 
each year during 2005-09, indicating strong growth in  output as it maintained its relative contribution 
to GDP while the overall economy was growing strongl y.  In employment terms, in 2007 the primary 
fishing subsector employed about 8.23 million people,  but its total contribution is even greater as the 
fish processing industry and other secondary activities employed over 18.27 million people.  
Interestingly, in the combined primary and secondary areas, 19.3 million women were employed 
compared with 7.2 million men. 
31. Throughout the 2004-07 period, distant-water fishing brought in a greater annual catch than 
all other sectors combined, although aquaculture show ed the greatest growth, with production almost 
doubling to 85,087 tonnes from 2004 to 2007 (Table IV.7 ).  Aquaculture production takes place at all 
levels, from simple subsistence ponds with low productivity of about 2 kg/m2/year to intensive 
recirculation aquaculture systems and larger comme rcial farms with much higher productivity.  In 
addition to shrimps, the most commonly cultivated fish are tilapia, clarias, and carp.  
32. Freshwater and inshore capture fishing is carried  out by a large fleet of artisanal canoes as 
well as by 137 inshore shrimping vessels and 40 inshor e fishing vessels.  In addition to shrimps, the 
major fresh-water species include tilapia, chrysich thys, gymnarchus, lates, and heterotis.  Distant-
water fishing is carried out by a fleet of 70 vessels.  Nigeria WT/TPR/S/247 
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Table IV.7 
Estimated output for fisheries, 2004-07 
('000 tonnes) 
 2004 2005 2006 2007 
Artisanal     
 Coastal and brackish water  227.5 259.8 268.9 280.1 
 Inland rivers and lakes  207.3 230.8 258.7 244.1 
Aquaculture 43.9 56.4 84.5 85.1 
Industrial (trawlers)     
 Inshore fish 16.1 18.7 18.1 18.0 
 Inshore shrimp 12.5 10.0 13.8 6.0 
 EEZ 1.9 1.9 0.9 2.2 
Distant water 648.0 511.5 546.5 739.7 
Source: Information provided by the Federal Ministry of Agri culture and Rural Developmen t, Fisheries Department. 
33. Nigeria is a net importer of fish and fish  products, although exports have increased 
significantly since 2003, rising from very low amounts in 2003 to over US$337 million in 2009 (Table IV.8).  Based on data provided to UN Comt rade by importing countries and data provided to 
the WTO by the authorities, most exports are frozen  shrimps going to EU countries.  Exports to the 
EU must be certified by the Fede ral Department of Fisheries.  Th e Federal Departme nt takes samples 
from each consignment for physical analysis and labo ratory analysis in the EU-certified laboratory in 
the Federal Department of Fisheries in Lagos . 
Table IV.8 
Trade in fish products, 2003 and 2006-09 
(US$ million) 
HS 
Code Product description 2003 2006 2007 2008 2009 
E x p o r t s        
030613 Shrimps & prawns, whether or not in shell, frozen .. 0.05 44.78  68.49  333.78 
030614 Crabs, whether or not in shell, frozen .. .. 0.76  1.67  1.79 
       
03 Fish and crustaceans, molluscs and other aqua tic invertebrates 52,039  0.44 57.1  73.25  337.04 
I m p o r t s        
030379 Fish n.e.s., frozen, whole 181.16  313.04 611.93  277.15  341.10 
030374 Mackerel, frozen, whole 139.48  214.69 300.18  159.82  158.36 
030551 Cod dried, whether or not salted but  not smoked 6.68  2.07 16.91  33.80  114.66 
030559 Dried fish, other than cod, not smoked 7.83  17.15 12.85  14.18  51.14 
030351 Herrings (Clupea harengus, Clupea pallasii), frozen (excl. 
fillets/other fish meat  of 03.04/livers & roes) .. .. .. .. 48.02 
       
03 Fish, crustaceans, molluscs, aquatic invert ebrates n.e.s. 451.88  746.13 1,185.96  622.11  751.06 
.. Not available. 
Note: Data for 2004 and 2005 are not available. Source: UN Comtrade. 
34. Imports, on the other hand increased steadily fro m 2003 to 2007 before falling back sharply in 
2008 and recovering in 2009.  The main imports are "fish n.e.s., frozen, whole" (HS 030379), 
followed by frozen mackerel and dried cod.  Acco rding to UN Comtrade, the main sources of imports 
were Chile, China, and Australia with 13%, 10%, and 8% of total imports in HS Chapter 03 
respectively but, according to the authorities, the main sources of supply were EU member States, 
Norway, China, Argentina, and Uruguay. WT/TPR/S/247 Trade Policy Review 
Page 52 
 
 
(b) Policy 
35. The Federal Government is responsible fo r managing marine resources and shares 
responsibility with the states for fishing in inland rivers  and lakes.  The Departme nt of Fisheries in the 
Ministry of Agriculture and Rural Development is  responsible for nationa l policy development and 
implementation through several agencies including the Fisheries Resources Monitoring Control and 
Surveillance Unit; the Fish Trade Branch; the Fish Production Division; Fisheries Support Services; 
and the Fish Quality Control and Assurance Services .  It also works with other public agencies to 
implement policy, including the Nigeria Customs Service, the Ports Authority, the Standards 
Organization of Nigeria, the Inland Waterways Department, and the state fisheries departments; as 
well as the Nigerian navy. 
36. Nigeria is a contracting party to the Intern ational Commission for the Conservation of 
Atlantic Tunas since 2007.  It is also a member of  the Fisheries Committee fo r the West Central Gulf 
of Guinea (FCWC), and a member of the Minist erial Conference on Fisheries Cooperation among 
African States Bordering the Atlantic Ocean (ATLAFCO). 
37. National policy is focussed on stock management, mainly through mesh size limits but also 
through regulations requiring that turtle excluder devices (TEDs) be attached to trawl nets.  In 
addition, every operating vessel must have an annua l licence and there are limits to the overall length 
(LOA) and gross registered tonnage (G RT) of fishing and shrimp trawlers.20  However, it has been 
reported that licences are not used to limit the num ber of vessels operating and that there is a high 
level of illegal transfer from trawlers to canoes at sea and poaching by foreign vessels, even though 
arrests and prosecutions have been made.21  The Department of Fisheries, in collaboration with the 
Nigerian navy is currently focussed on tackling unaut horized fishing trawlers and pirate attacks in 
territorial waters and the EEZ.  Monitoring is curren tly carried out by fisheries inspectors stationed on 
fishing jetties and landing sites to monitor catches and inspect trawl nets.  Each year approximately five seizures of illegal nets are made with fines depe nding on the offence.  It was also pointed out by 
the authorities that, since the start of 2010, exports to the EU must be accompanied by a Catch 
Certificate for Fish and Fishery Products caught in Nigerian territorial waters and the EEZ.  The 
Department of Fisheries currently relies on the navy  to prevent illegal fishing and to protect fishing 
vessels from attacks by pirates, and intends to acquire one or two patrol vessels and to start 
installation of a vessel monitoring system in 2011. 
38. The sea within 5 nautical miles (9.26 km) is reserved for artisanal fishing from canoes, and 
includes the brackish water in the creeks and la goons.  The Federal Department of Fisheries is 
responsible for enforcing the 5-mile limit.   
39. Stock management policies also include mesh si ze limits that apply to inland fishing as well 
as inshore fishing along with prohibitions on poisoni ng and other regulations designed to limit catches 
and prevent pollution.  However, lack of resources  means the regulations are ineffectively applied.
22  
As part of the National Special Programme for Food Security (NSPFS), the Aquaculture and Inland 
Fisheries Project completed a nationwide inventory of inland water resources.  The Project also identified better fisheries management as crucial for sustainable fishing. 
                                                     
 
20 Licenses are available for:  inshore shrimping; inshore fishing; fishing in the EEZ; and three 
categories of fishing in international waters (Category A for Nigerian flagged vessels, fishing in foreign waters 
and landing in Nigerian ports; Category B for foreign flagged vessels chartered by Nigerians, fishing in foreign 
waters and landing in Nigerian ports; and Category C for direct importation). 
21 FAO (2007). 
22 FAO (2007). Nigeria WT/TPR/S/247 
 Page 53 
 
 
40. Apart from regulations related to conservati on, national policy also concerns domestic 
marketing, aquaculture, and exports.  Since late 2009, construction has started on several model fish 
markets each of which will include sales area a nd infrastructure.  Construction is under way on 
markets in Nasarawa and Imo States, and two more in Kebbi and Ondo States are to start in 2011.  
The introduction of cage culture systems, the Sust ainable Aquaculture Project, and the establishment 
of fish farm estates are intended to encour age improved aquaculture systems from both the 
environmental and ec onomic perspectives. 
(iii) Forestry 
41. The forest subsector in Nigeria accounted fo r between 0.4% and 0.45% of GDP each year 
during 2005-09.23  However, this figure only refers to w ood and wood products and not to other forest 
products, like rubber, which are of growing importa nce.  Forests are also important for other 
economic and environmental reasons, including tourism and wildlife.   
42. Although the forest area has been declining for ma ny years, it still covers about 12% of total 
land area, including over 100,000 km2 of forest reserves, mostly in the savanna regions.  These forest 
reserves are managed by the state forestry departme nts and are the main source of forestry products 
and services.  In addition, there are about 4 million hectares in conservation areas (national parks, 
wildlife reserves and game reserves).24  The main products are timber, fuel wood, and charcoal. 
43. Nigeria has a trade surplus in wood and wood products (HS 44) as exports increased from 
negligible levels in 2003 to US$112 million in 2009 while imports declined from US$148 million to 
US$97 million.  The main exports are densifie d wood (HS 441300), cont inuously shaped wood 
(HS 40910), fuel (HS 440110), and charcoal (HS 440210 and 440290).25  Exports of timber, 
rough/sawn are prohibited.26 
44. Tariffs on imports of wood and wood products  vary from 5% to 20% with 5% VAT on all 
tariff lines in HS chapter 44.  An additional char ge of 10% is applied to wooden boards, pallets, 
boxes, etc.   
45. Nigeria is a member of the International Tropical Timber Organization and the African 
Timber Organization. 
46. The Federal Department of Forestry in the Ministry of Environment is responsible for 
representing Nigeria in international fora and intern ational treaties and for providing policy guidelines 
for the state-level authorities.  The National Fo restry Development Committee is responsible for 
formulating forestry policy at the national leve l although state governors and local authorities are 
responsible for land use, including forestry manage ment.  For many years, national policy has been to 
conserve and restore forest areas, including throu gh current forest policy.  However, deforestation 
continues to be a problem with lack of funding , failure to implement forest policy, and the 
discretionary power of state governors to de-reserve forest areas cited as the main problems in some 
                                                      
23 Central Bank of Nigeria (2010), p. 247. 
24 FAO online information.  Viewed at:  http ://www.fao.org/docrep/004/ab578e/AB578E06.htm 
[December 2010]. 
25 Comtrade online information.  Viewed at:  http://comtrade.un.org/db/ [December 2010]. 
26 Nigeria Customs Service online information.  Viewed at:  at:  http://www.customs.gov.ng/ 
ProhibitionList/export.p hp [December 2010]. WT/TPR/S/247 Trade Policy Review 
Page 54 
 
 
districts.27  Other reports have highlighted problems w ith illegal logging, and corruption in providing 
timber concessions.28 
(2) MINING AND ENERGY  
(i) Crude oil production 
(a) Situation 
47. In 2009, crude petroleum production contributed  16% to Nigeria's GDP, down from over 27% 
in 2003.  Despite its declining importance to the economy, the petroleum sector remains critical and 
represents practically all of export earnings and two thirds of governme nt revenue, but employs 
relatively few people.  In 2008, Nigeria was the 13th biggest producer of crude oil in the world.  
Production was about 1.842 million bbl/d  in 2009, down from a peak of 2,365 in 2005 (Table IV.9).  
As a member of OPEC since 1971, Nigeria has agreed to production limits that vary from one year to the next and are currently set at 1,673,000 bbl/d.  
Table IV.9 
Oil reserves and production, 2005-09 
 2005 2006 2007 2008 2009 
Proven crude oil reserves (b illion bbl) 36,220 37, 200 37,200 37,200 37,200 
Production ('000 bbl/d) 2,365.9 2,233.9 2,059.3 2,017.4 1,842.0 
Annual average spot price (US$/bbl ) (all crude) 50.65 61.08 69.08 94.45 61.06 
Source: OPEC (2010), Annual Statistical Bulletin, 2009 . 
48. The main source for Nigeria's oil is the Nige r Delta, the Onshore and the Shallow Offshore 
basins but exploration is now focussed on deep offshore areas with some onshore activity in the 
northeast.  As a result of exploration, proven reserves increased from 31.5 billion bbl in 2004 to 
37.2 billion in 2006 and have been stable since then .  Most crude is high quality with a low sulphur 
content (Bonny Light and Forcados) and is a pref erred feedstock for petrol production.  The high 
quality also means that Nigerian crude production usually trades at a slight premium over other 
benchmark prices.29 
49. Over the past few years, production of crude o il has suffered due to security problems and the 
destruction of production facilities in the Niger Delta area.  Security concerns and associated damage 
to oil infrastructure have meant a considerable proportion of potential production has been shut-in 
and, over the past few years, some co mpanies have been forced to declare force majeure  on exports.30  
Potential oil production has been estimated at 2.9 million bbl/d at the end of 2009 but actual 
production has been well below this level due to a co mbination of security incidents, leaks, and theft 
(including bunkering activities).31 
50. Most of Nigeria's oil production is exported;  about 40% goes to the United States followed 
by India (11%) and Brazil (10%). 
                                                      
27 Agbeja (2008). 
28 International Tropical Timber Organization (2005). 
29 OPEC (2010), p. 19. 
30 Central Bank of Nigeria (2009), pp. 95. 
31 U.S. Energy Information Administration online in formation.  Viewed at:  http://www.eia.doe.gov/ 
cabs/Nigeria/Oil.ht ml [December 2010]. Nigeria WT/TPR/S/247 
 Page 55 
 
 
(b) Policy 
51. Under the Constitution, the Federal Government owns all minerals, including crude oil and 
natural gas, and under the Petroleum Act of 1969 production licences may only be granted to Nigerian 
citizens.  In practice, most production is thr ough joint ventures or production-sharing contracts 
between the state-owned Nigerian National Petrol eum Corporation (NNPC) and international oil 
companies.  The NNPC was created in 1977 to both regulate and to engage in  commercial activities in 
the oil sector.  In 1988, it was divided into 12 s ubsidiary companies involved in different aspects of 
the oil and gas industries, including the refi neries in Port Harcourt, Warri, and Kaduna.   
52. Under the joint-venture agreements, which acc ount for about 90% of production, all operating 
costs and all revenues are shared in proportion to  the ownership, with NNPC typically having 57% 
ownership.  The joint-venture arrangements pose problems for NNPC as it provides its share of all 
costs through a system of monthly cash calls.  Pr oduction-sharing contracts (PSCs) were created to 
get around the cash flow problems caused to NNPC by  the joint venture arrangements.  Under a PSC, 
the oil company has the right only to oil to cover the cost of production, return on investment and, 
subject to NNPC approval, oil to cover taxes a nd royalties.  The balance is shared with NNPC.32  
PSCs account for about 8% of production of crude oil. 
53. Oil companies may qualify for various tax incen tives, also available for prospecting and 
production (Table II.2).  However, they are also subj ect to a complex set of taxes, bonuses, rents, fees, 
and royalties including:   
- taxes based on profits and, under the Petrol eum Profits Tax Act, the rate is 85%;  
- rents based on factors like the size of the contract area;  
- royalties based on production and whether it ta kes place onshore, shallow offshore, or 
deep offshore;  and  
- bonuses payable when the PSC or joint-venture agreement is signed, with further 
bonuses payable when a production threshold is reached.   
54. In 2008, in an effort to increase production,  162 concession licences for oil exploration and 
production were awarded to different companies and 24 marginal fields were assigned to 31 domestic 
companies.  
55. The marginal field initiative is an attemp t to encourage production from discoveries on 
concessions that were already awarded under joint- venture agreements but that have not been 
developed for at least ten years.  Such fields may be assigned to domestic oil companies, which can 
sign agreements with the NNPC and other parties to  the joint-venture agreement.  The domestic oil 
company can then farm-out the operation to other operators.33  
56. The Department of Petroleum Resources in the Ministry of Energy is responsible for policy 
for the oil and gas sectors.  The Ministry of En ergy was formed in December 2006 by the merger of 
the Ministry of Petroleum Resources and the Minist ry of Power and Mines.  In 2000, the Government 
established the Oil and Gas Sector Reforms Impl ementation Committee (OGIC), with the task of 
                                                      
32 Nigerian Investment Promotion Commission online information.  Viewed at:  http://www.nipc.gov. 
ng/contract.html. 
33 For example, see Hardy Oil and Gas plc online in formation.  Viewed at:  http://www.hardyoil.com/ 
Assests/nigeria_main.htm. WT/TPR/S/247 Trade Policy Review 
Page 56 
 
 
developing a new policy for the sector.  In Sept ember 2007, the Federal Executive Council adopted a 
National Oil and Gas Policy based on the recomme ndations from OGIC, which was then given the 
task of preparing recommendations for the legal a nd institutional framework to implement the policy. 
57. The resulting Petroleum Industry Bill (PIB) is cu rrently before the National Assembly and is 
designed to reform the entire hydrocarbon sector.  The PIB's provisions include: 
 - the separation of functions relating to po licy formulation, regulation, and commercial 
  operations; 
 - the inspection service would be taken out of the Ministry of Energy and be placed in 
 an independent regulatory and licensing agency;  
 - the NNPC would be restructured and focus only on commercial activities.  Its policy 
 and regulatory functions would be removed and given to independent agencies.  The 
 new national oil company would be a limite d liability enterprise able to raise its own 
 debt and equity.  Finance and invest ment, and research functions would go to 
 independent agencies; 
 - incorporated joint ventures would replace the current joint-venture regime.  An 
 incorporated joint venture would be owned by NNPC and the oil company and would 
 be able to raise its own funds through equity or loans; 
 - a new area-management scheme would be set up to encourage development, and 
 would make undeveloped areas available for reallocation.  
58. As part of the reform of the energy sector, the Nigerian Content Development Bill was signed 
into law in April 2010.  The law obliges oil compani es to use a Nigerian company if it is capable of 
fulfilling the task, if it has higher domestic content, a nd if its bid is not more that 10% above the price 
of the bid that would otherwise have won.34 
59. The main challenges facing crude oil production,  along with oil refining and natural gas, 
continue to be lack of transparency, corruption, and security.  While the new Petroleum Industry Bill 
could be a major step towards facing these challe nges, a lot of uncertainty remains about its 
implementation.   
(ii) Downstream oil 
60. Nigeria has four oil refineries, two in Port Harcourt (with capacities of 60,000 bbl/d and 
150,000 bbl/d) and one each in Warri (105,000 bbl/d) and Kaduna (110,000 bbl/d) for a total refining 
capacity of 425,000 bbl/d.  Refined oil is piped to a number of storage depots located around the 
country.  The NNPC or its subsidiaries owns and c ontrols all oil refineries, pipelines, and storage 
depots in Nigeria.   
61. The quantity of crude oil refined varies greatly from one year to the next and the refineries 
may close completely, such as in 2006 and 2007 when the refineries in Wari and Kaduna were closed.  
According to the Central Bank, in 2009, total dom estic production of refine d products was 2.9 million 
tonnes, significantly lower than in 2008 when it was 5.5 million tonnes.35  It has also been reported 
                                                      
34 U.S. Energy Information Administration online in formation.  Viewed at:  http://www.eia.doe.gov/ 
cabs/Nigeria/Oil.ht ml [December 2010]. 
35 Central Bank of Nigeria (2010), p. 131. Nigeria WT/TPR/S/247 
 Page 57 
 
 
that in 2009, poor maintenance, theft, fire, and a ttacks on pipelines providing crude to the refineries 
meant that none of them were ope rating anywhere near capacity, and between 0-15% of total refining 
capacity was operational.36  The Central Bank's data for 2009 suggest that production was about 
58,000 bbl/d, or about 14% of capacity in that year.37  
62. In 2009, Nigeria consumed about 280,000 bbl/d of oil.38  With production of refined products 
much lower than consumption, Nigeria imports most of its refined oil.   
63. Fuel continues to be subsidized in Nigeria.  In the past, the Federal Government allocated 
crude oil to the NNPC for refining and sale to privat e retail outlets at fixed prices.  Since 2003, the 
Federal Government has determined the prices of petroleum products (now covering petrol and diesel 
only), and it provides a subsidy to meet the diffe rence between these prices and a price set by the 
Petroleum Products Pricing Regulatory Agency (PPPRA).  The price set by the PPPRA is based on import parity pricing adjusted for cost of tr ansportation, distribution, and marketing.   
64. The cost of the subsidy was about N
421 billion in 2009, estimated to  be the equivalent of 2-
4% of non-oil GDP.39  Another report states that the estimated cost of the subsidy is US$4 billion a 
year and that low prices have discouraged inv estment in refining and encouraged smuggling of 
refined products to neighbouring countries.  The re sult has been shortages of petroleum products in 
Nigeria and, along with poor domestic supply of el ectricity, helps to explain why most households 
rely on burning wood or charcoal for energy.40 
65. Although the Federal Government has tried sev eral times to remove fuel subsidies, the 
resulting popular unrest has prevented it from doing so.  However, the prices of petrol and diesel have 
been increasing petrol rose from US$0.39 per litre in 2004 to US$0.59 in 2008 and diesel from 
US$0.45 to US$1.13.  Despite the increases, petrol prices are still lower than in neighbouring countries, although diesel is closer to the regional average.  The Government has also continued its 
efforts to deregulate fuel prices but con tinues to face considerable domestic opposition.
41  
(iii) Gas 
66. Nigeria has proven reserves of natural gas of 5.25 trillion m3 or 2.8% of total world reserves.  
Most gas is produced along with crude oil, so production tends to suffer from the same security 
problems as crude oil production and, according to  the Central Bank of Nigeria, gas production 
declined sharply in 2009 due to the attacks on o il installations and shut-in production by the oil 
companies (Table IV.10).  For a variety of reasons , including lack of infrastructure to produce and 
market natural gas, a lot of it is flared off.  Th e proportion flared off had been decreasing steadily and 
reached a low of about a quarter of production in 2008 before increasing to n early one third in 2009 
                                                      
36 U.S. Energy Information Administration online in formation.  Viewed at:  http://www.eia.doe.gov/ 
cabs/Nigeria/Oil.ht ml [December 2010]. 
37 The number of barrels per tonne depends on density, which varies with different products.  The 
rough guide is a barrel per day is equal to 49.8 tonnes per year.  BP online information.  Viewed at:  
http://www.bp.com/conversionfact ors.jsp [December 2010]). 
38 U.S. Energy Information Administration online in formation.  Viewed at:  http://www.eia.doe.gov/ 
cabs/Nigeria/Oil.ht ml [December 2010]. 
39 IMF (2009b). 
40 EIU (2010b). 
41 Adenikinju (2009). WT/TPR/S/247 Trade Policy Review 
Page 58 
 
 
due, once again, to the security situation.  Flaring re presents a considerable cost to the State, estimated 
at about US$1.46 billion in lost revenue in 2007.42 
Table IV.10 
Natural gas production, 2005-09 
(million m3) 
 2005 2006 2007 2008 2009 
Used as fuel 2,261.5 2,584.9 2,656.9 3,203.4 1,993.6 
Sold to industries 13,844.4 15,824.0 16,264.4 19,615.2 10,221.1 
Sold to LNG 5,311.5 6,071.0 6,239.9 7,514.6 4,442.7 
Gas lift 1,026.9 1,173.7 1,206.4 1,415.1 1,172.0 
Converted to NGLs 1,310.6 1,498.0 1,539.7 1,854.3 1,163.0 
Gas flared 22,920.5 18,378.9 21,130.4 17,844.8 13,457.2 
Total 57,369.4 57,753.7 65,936.5 66,640.8 41,534.2 
Source: Central Bank of Nigeria (2010), Annual Report and Financial Statement for the Year Ended 31st December, 2009 , 
Abuja, p. 261. 
67. Most exports of gas are as liquefied natural gas (LNG).  About two thirds go to Europe 
(mainly to Spain, France and Portugal) followed by Asia and Mexico.  The main gas processing 
facility is on Bonny Island near Port Harcourt,  which has been expanding steadily since it started 
production in 1999 and currently h as a production capacity of 22 m illion tonnes of LNG per year 
(30,350 million m3).43  The Bonny Island facility  is operated by Nigeria LNG Ltd, a joint-venture 
company owned by NNPC (49%), Shell Gas BV (25.6%), Elf (15%) and Agip (10.4%).44  Additional 
LNG plants are due to start production in 2012.   
68. Nigeria has begun exporting natural gas to Ghana,  Togo, and Benin through the West African 
Gas Pipeline (WAGP).  Construction of the pipeline wa s stared in 2005 and, after a number of delays 
related to technical and security problems, exports  started in early 2010.  Exports should reach 
4.7 million m3 per day by end-2010 with plans to increase both the capacity and the length of the 
pipeline (to Côte d'Ivoire and, possibly, to Senega l).  The pipeline is owned by the West African Gas 
Pipeline Company Limited, a joint venture betwee n Chevron (36.7%), NNPC (25%), Shell (18%), 
Volta River Authority (16.3%), Société Togolaise de Gaz (2%), and Société Béninoise de Gaz (2%). 
69. The Escravos Gas to Liquids project, which is currently under construction in Escravos, about 
100 km from Lagos, is a joint venture between Chev ron Nigeria Ltd (75%) and NNPC (25%).  When 
the first phase is completed the plant will produce about 34,000 bbl/d of liquid petroleum products 
from natural gas and there are plans to expand production to 120,000 bbl/d within ten years of 
completion.45 
70. The Nigerian Gas Company (NGC), a subsidia ry of NNPC, has a monopoly on the supply of 
gas to the domestic market.  It operates a 1,000 km gas gathering, transmission, and distribution pipeline network with a capacity of about 56.6 million m
3 per day.  Up to 2008, gas consumption 
increased as demand for fuel for electricity generating plants, industrial enterprises, and reinjection in 
oil fields all increased. 
                                                      
42 U.S. Energy Information Administration online in formation.  Viewed at:  http://www.eia.doe.gov/ 
cabs/Nigeria/NaturalGas .html [December 2010]. 
43 U.S. Energy Information Administration online information.  Viewed at:  http://www.eia.doe. 
gov/cabs/Nigeria /Oil.html [December 2010]. 
44 Hydrocarbons-technology.com online information.  Viewed at:  http://www.hydrocarbons-
technology.com/projects/ bonny/ [December 2010]. 
45 Hydrocarbons-technology.com online information.  Viewed at:  http://www.hydrocarbons-
technology.com/projects/es cravos/ [December 2010]. Nigeria WT/TPR/S/247 
 Page 59 
 
 
71. Following several earlier plans, and in response to rising domestic and international demand 
for gas, the Gas Master Plan was approved by the Federal Government in early 2008.  According to 
the NNPC, the Plan is intended to address a number of challenges, such as the export orientation of 
the sector as opposed to domestic supply;  a short-te rm reserves constraint, which means gas in some 
fields only becomes available after the oil has been  extracted;  inadequate infrastructure;  and the 
different capacities of different sectors to pay for g as.  Another issue noted by the NNPC is the debt, 
estimated at over N 10 billion, owed to it and the international oil companies by the domestic market 
(mostly by state trading enterprises, such as the Power Holding Company of Nigeria).46 
72. The Plan's objectives are to improve the commerc ial exploitation and management of the gas 
sector, and its key strategies are to stimulate the multiplier effect of gas in the domestic economy; to 
position Nigeria competitive in high-value export markets; and to guarantee the long-term energy security of Nigeria.
47  The Plan is made up of the: 
- National Domestic Gas Supply and Prici ng Policy and Regulations, which define 
three categories of consumer:  the domestic sector, with the greatest likelihood of showing a strong multiplier effect on invest ment, such as the power industry; the 
industrial sector that uses gas as raw materi al, such as the fertilizer, LNG or gas-to-
liquids industries;  and the commercial sector where gas is used as a fuel by enterprises; 
- Gas Infrastructure Blue Print, which aims to integrate the infrastructure network with 
pipelines delivering wet gas for treatment to  regional hubs and transporting dry gas to 
major cities in Nigeria;  and 
- Gas Domestic Supply Obligations, which im poses supply and reserve obligations on 
gas producers to ensure sufficient supply to meet domestic demand.
48   
73. There are also several incentives available fo r investments in the gas sector (Table II.2). 
(iv) Solid minerals 
74. Although oil and gas in Nigeria attract the greate st attention, the country is also richly 
endowed with other mineral deposits .  However, development of solid  minerals has been dwarfed by 
the petroleum industry and accounted for only about 0.16% of GNP in 2009.   
75. According to official sources, there are large reserves of many metals and minerals across 
Nigeria, including:  1.5 billion tonnes of coal; 16 billion barrels of bitumen by open-cast mining; 
3.7 billion tonnes of iron ore; plus large deposits of  lead-zinc ore;  and commercial reserves of other 
metals and minerals such as gold and tin, as well as  precious stones.  At present, most mining activity 
in Nigeria is carried out by sma ll-scale enterprises, often illegally, with relatively little mechanization 
and low levels of technology.  With a few exceptions , large-scale foreign investment has been waiting 
for a better legal and financial e nvironment before committing resources (Table IV.11).  As of late 
2010, the main investments were: 
                                                      
46 NNPC (2007). 
47 NNPC online information.  Viewed at:  http://www.nnpcgroup.com/N NPCBusiness/ Midstream 
Ventures/NigerianGasMasterPlan.aspx [December 2010]. 
48 Onyeukwu (2009). WT/TPR/S/247 Trade Policy Review 
Page 60 
 
 
 - in aluminium, where United company RUSAL of Russia holds a 77.5% stake in 
ALSCON.  The ALSCON restarted production in  February 2008, after being close for 
nearly ten years.  Full production was reporte d to have been reached in 2010;  and  
 - a concession agreement was awarded to Global Steel Holdings Ltd to manage the 
government owned Ajaokuta Steel C. Ltd and National Iron Ore Mining Co.  
However, according to the authorities, this was cancelled in 2008 due to non-
performance and is currently before the International Court of Arbitration.  
Investment in steel mills by other enterprises are also under way and proposed.49 
Table IV.11 
Production of solid minerals in Nigeria, 2004-08 
Commodity Units 2004 2005 2006 2007 2008 
Aluminium Tonnes 0 0 0 0 20,000 
Gold kilograms 30 30 50 180 200 
Lead-zinc ore '000 tonnes 200 0 492,000 382,000 644,000 
Lead, refined '000 tonnes 5,000 5,000 5,000 5,000 5,000 
Niobium and tantalum concentrate Niobium content, tonnes 40 35 40 70 75 
Steel Tonnes 40,000 100,000 500,000 500,000 500,000 
Tin Tin content, tonnes 1,000 1,300 1,400 180 185 
Source:  USGS (2009), "The Mineral Industry of Nigeria", by Philip M. Mobbs, 2009 Minerals Year Book:  Nigeria 
[Advance release] .  Viewed at:  http://min erals.usgs.gov/minerals/pubs /country/2009/myb3-2009-ni.pdf.  
76. The Ministry of Mines and Steel Development is responsible for policy development in the 
mining sector, and for providing mapping and other ca rtographic services, like charting mineral titles.  
In 2009, the first geological survey of the country  was completed at 1:100,000, and a more detailed 
survey at 1:50:000 should be completed in 201 1.  The Raw Materials Research and Development 
Council (RMRDC), an agent of the Federal Govern ment, has the job of promoting the development 
and use of Nigeria's industrial raw materials.  Th e Mining Cadastre Office (MCO) is an autonomous 
body responsible for processing applications for mine ral titles and permits.  Over the past few years 
there has been a significant shift in  policy as the Government has reoriented its role away from being 
the owner of resources and the operator of mines to being the administrator and regulator of the 
sector.   
77. In 2004, the Federal Government and th e World Bank announced the Sustainable 
Management of Mineral Resources Project in Nigeria, costing N 1 billion.50  The Project aims to 
improve the Government's capacity to manage mine ral resources in a sustainable way.  The initial 
focus of the project was on improving production by small-scale miners through credit finance.  The 
second stage aimed to improve governance, transpar ency, and support services in order to attract 
private investment.  The services to the industry include mapping, mineral assessment, and a mining 
cadastre system.51   
78. In order to improve the climate for investment  in mining, the Minerals and Mining Act of 
2007 replaced the Minerals and Mining Decree of  1999 as the principle legislation covering the 
mining sector.  Under the new Act, the Federal Gove rnment's ownership and control of all mineral 
resources in Nigeria was confirmed, but the title to  minerals can be passed to other entities that 
                                                      
49 USGS (2009). 
50 Mbendi online information.  Viewed at:  http://www.mbendi.com/indy/ming/af/ng/p0005.htm 
[December 2010]. 
51 World Bank online information.  Viewed at:  http://web.world bank.org/external/projects/main? 
pagePK=64312881&piPK= 64302848&theSitePK=40 941&Projectid=P086716  [December 2010]. Nigeria WT/TPR/S/247 
 Page 61 
 
 
comply with the provisions of the Act and obtain the necessary licence.  The Act provides for a series 
of tax incentives for mining, including accelerated  capital allowances, carryover of losses, and 
exemptions from import duties for imports of mining equipment (Table II.2).   
79. The right to prospect for or to extract any mineral requires the appropriate permit or licence 
from the MCO, which is also responsible for maintain ing a cadastral atlas and a register of titles.  The 
permits and licences required are: 
- a reconnaissance permit, which is needed fo r a preliminary investigation and gives the 
holder the non-exclusive right to enter or tr averse land and to ta ke surface samples.  
The permit is valid for one year, renewabl e annually.  A permit cannot be given for 
land already the subject of an exploratory licence, mining lease or water use permit; 
 - an exploration licence gives the holder th e exclusive right to carry out a detailed 
exploration of the areas, up to 200 km2, subject to the licence.  The licence is valid for 
three years, which may be renewed a maxi mum of twice for periods of two years 
each; 
 - a mining lease may cover a maximum area of 50 km2.  It can only be granted to the 
holder of the exploration licence or small-scale mining lease covering that area.  A 
mining lease is valid for 25 years, renewable every 24 years; 
 - a small-scale mining lease applies to areas between 5 acres and 3 km2.  Other 
conditions may be imposed by the Small S cale and Artisanal Mining Department of 
the Ministry;  and  
 - a quarry lease applies to material obtaine d by quarrying, such as marble, limestone, 
grave, gypsum, etc.  A quarry lease applies to an area of up to 5 km2 for periods of up 
to five years (renewable).  
80. The Act also provides for the transfer of mining titles, subject to the approval of the 
Minister.52  In 2010, detailed draft regulations impl ementing the 2007 Act were released by the 
Ministry of Mines and Steel Develo pment to the public for comment.53 
(v) Electricity 
81. Despite plentiful supplies of raw materials and considerable policy reform over the past few 
years, including the creation of the Nigerian Electricity Regulatory Commission (NERC), Nigeria 
continues to suffer from inadequate generation, transm ission, and distribution of electricity.  Less than 
half the population has access to electricity and those that do endure frequent power-outages.  
Installed generating capacity increased in 2008 by 21% to just under 8,500 MW, but average capacity 
utilization fell from an already low level of 35% to just 27%.54  Therefore, despite the increase in 
installed capacity, power generation actually declin ed in 2009, continuing the long-term trend. 
82. The Power Holding Company of Nigeria (PHCN) , a state-owned enterprise, has a virtual 
monopoly on the generation, transmission, and distribution of electricity in Nigeria.  For years the 
                                                      
52 Aélex online information.  Viewed at http://aelex.com/files/MI NERAL%20LICENSING%20 
REGIME.pdf [December 2010];  and Gbenga Biobaku & Co (2009). 
53 Ministry of Mining and Steel Development onlin e information.  Viewed at:  http://www.mmsd. 
gov.ng/publications/publications.asp  [December 2010]. 
54 Central Bank of Nigeria (2010), p. 132. WT/TPR/S/247 Trade Policy Review 
Page 62 
 
 
PHCN has been hampered by a low tariff structure that prevented it from meeting costs.  In addition, 
revenue collection has been poor, and theft, thro ugh illegal tapping of power  lines, high.  Although 
the Government is reported to have invested  over US$10 billion in the power sector between 2000 
and 2007 the power generation and transmi ssion system declined over the period.55  In 2009, the 
PHCN accounted for 87% of total electricity ge nerated and independent power plants for 13%. 
83. The Electric Power Sector Reform (EPSR) Act, passed in 2005, provided for the creation of 
the NERC and the end of the monopoly held by the National Electric Power Authority (NEPA).  Under the Act, the NEPA was tran sformed into the Power Holding Company of Nigeria, which is the 
umbrella company for 7 generating companies, 11 distribution companies, and a single transmission 
company. 
84. The NERC was established in October 2005 with the authority to regulate the electricity 
industry; issue licences for the generation, transmis sion, and distribution of electricity; and enforce 
compliance with national legislation.  In 2008, the NERC put in place a Multi Year Tariff Order to provide some predictability in electricity pricing.   The Tariff Order was derived from a model that 
sought to ensure an adequate return on investment assuming efficient use of the infrastructure and the 
appropriate allocation of risk.  At the same time, the model took into account social objectives such as 
affordability and universal access while  keeping the tariff structure simple and predictable.  The Tariff 
Order sets out prices for a 15-year period subject to annual reviews with a major review every 5 years.  The current Order sets out a regulated average tariff of N
8.5/kWh on billed sales in 2010, which 
includes a subsidy of N 0.99/kWh.  The Order envisages prices increasing to N 10.00/kWh as the 
subsidy declines to zero, and assumes continui ng improvement in reducing losses and increasing 
revenue collection.56  The NERC started a major review of the Order in 2010, with the objective of 
establishing economic pricing for electricity so that consumer prices better reflect the costs of providing electricity. 
85. In the course of 2011, the NERC also intends to complete work on:  the regulatory 
frameworks for the generation and distribution of el ectricity, for renewable power generation; tariffs 
for coal-powered plants; guidelines for procurem ent of bulk power; development programmes on 
energy efficiency and demand-side management; an incentive package for the power sector;  and 
regulation on rights-of-way and access rights.  It has also established a bulk trading company, the 
Nigerian Bulk Electricity Trading Company PLC, to carry out contract management and bulk trading on behalf of the distribution companies. 
86. To encourage investment in the electricity sector, the EPSR Act provides for a number of 
fiscal incentives, including a tax holiday of up to five years, accelerated capital allowances, 
investment allowances, tax relief on dividends; a nd tax exemptions for exports of electricity. 
87. The Roadmap for the Power Sector, unveiled in August 2010, includes the sale to private 
investors of majority stakes in the 3 thermal gene rating plants and 11 distribution units;  concession 
agreements with the private sector for the 6 hydroelectricity plants; and placing the transmission 
company under a private management company (see section III(3)(v)). 
88. The Government's objective is to increase el ectricity generation to  9,800 MW by end-2011 
and 40,000 MW by 2020, through investment in exis ting plants and construction of new ones.  This 
                                                     
 
55 EIU (2010b). 
56 NERC (2008). Nigeria WT/TPR/S/247 
 Page 63 
 
 
increase in production will require annual investment  of at least US$3.5 billion in generation, 
transmission, and distribution.57 
89. According to the authorities, some progress has been made in improving electricity generation 
with the establishment of a "one-stop-shop" for ap plications for licences to build and operate new 
electricity generation plants.  The one-stop-shop in cludes representatives from the various responsible 
agencies, including the NERC, the Ministry of Finan ce, the Central Bank of Nigeria, the Ministry of 
Power, and the Ministry of the Environment.  As  of March 2011, 28 licences for electricity-generating 
plants have been issued by the Standing Co mmittee on Independent Power.  Power-purchase 
agreements between the generators and the tran smission company are being negotiated between the 
NERC and some independent power providers. 
90. The NERC, along with the Ministry of Petrol eum Resources, the Nigerian National Petroleum 
Corporation, and the international oil companie s, is negotiating gas supply and aggregation 
agreements and gas transportation agreements. 
(3) SERVICES  
(i) Transport 
91. Nigeria has an extensive transport system, although this is suffering from years of under-
investment and poor maintenance.  There are about  195,200 km of roads, 3,557 km of rail, 8,575 km 
of inland waterways, several ports, and 36 airports with paved runways.  The Federal Ministry of 
Transport has overall responsibility for policy ma king and, through a number of state-owned 
enterprises, for implementation of policy and inv estment in, and maintenance of infrastructure.58  The 
Ministry of Works is responsible for road build ing while the Federal Roads Maintenance Agency 
(FERMA) is responsible for routine maintenance.  The Ministry of Aviation is responsible for air 
transport.  
92. The Federal Government's Draft National Tr ansport Policy of August 2010 recognizes the 
vital importance of transport to Nigeria's deve lopment and seeks to address the many challenges 
facing air, water, and land-based transport systems.   The policy's goals are to "develop an adequate, 
safe, environmentally sound, efficient and afford able integrated transport system within the 
framework of a progressive and competitive market economy."59 
(a) Roads 
93. There are about 195,200 km of roads in Nigeria.  About 34,123 km are federal roads, which 
are constructed and maintained by the Ministry of Works;  about 30,500 km are state roads, which are 
the responsibility of the state governments;  and 129,577 km are local government roads.  About 
60,000 km of roads are paved (inc luding 1,194 km of expressways). 
94. In addition to their importance for transport and trade within Nigeria, several important trans-
African roads originate in or cross the country, including: 
                                                      
57 EIU (2010b). 
58 The state-owned entities involved in transport incl ude the following:  Nige rian Ports Authority;  
National Maritime Authority, Nigerian Unity Line Plc;  National Clearing and Forwarding Agency;  National 
Shippers Council;  Nigerian Inland Waterways Authority;  Nigerian Railway Corporation;  Maritime Academy 
of Nigeria;  Nigeria Institute of Transport Technolo gy;  and the Joint Dock Labour Industrial Council. 
59 Federal Government of Nigeria (2010). WT/TPR/S/247 Trade Policy Review 
Page 64 
 
 
- the Trans-Sahara Highway from Lagos, thr ough Niger and Algeria to Algiers.  The 
Highway is essentially completed but so me unpaved sections remain and many 
sections are in poor condition;  
- the Trans-Sahelian Highway from Dakar in Senegal to Ndjamena in Chad, going 
through Mali, Burkina Faso, Niger, Nigeria, and Cameroon.  Although most of the 
route is paved, many sections are in poo r condition and are not passable during some 
seasons; 
- the Trans-West African Coastal Highwa y, which goes westwards from Lagos to 
Dakar in Senegal crossing 11 countries.60  Most of the route is in poor condition;  and 
- the Lagos-Mombasa Highway is one of th e few east-west African links.  It goes 
eastwards from Lagos, across central Africa to  Mombassa in Kenya.  Slightly more 
than half the route is paved but much of it is in poor condition.61 
95. Most goods are transported by road in Nigeria, with the exceptions of oil and gas carried by 
pipelines.  About half of all roads are in poor  condition and passenger and goods vehicles are often 
overloaded and in poor co ndition.  The Draft National Transport Policy sets the objective of greatly 
improving the quality of road infrastructure based on funding from Government, road user charges, 
and private sector investment.  The private-sector investment could be in return for tolling concessions.  No data are available on the ex tent of private investment in roads. 
96. Vision 20:2020 also promotes the development of the road network and endorses the 
participation of the private sector in road buildin g, either build-operate-t ransfer (BOT) or build-
operate-own arrangements, as well as rail, water, and air transport infrastructure.  In May 2009, the 
Government completed a 25-year agreement with th e Bi-Courtney Consortium to rebuild, expand, and 
operate the Lagos-Ibadan expressway.
62 
(b) Railways 
97. There are about 3,557 km of single track rail in Nigeria, made up principally of two lines 
going from south to north.  One line starts in Lagos and goes through Ibadan, Ilorn, Kaduna, Kanor, 
and ends in Nguru.  The other st arts in Port Harcourt and heads north through Enugu and Makurdi and 
ends in Maiduguri.  There are a number of branch lines from the two main lines and a single link to Kaduna.  The Nigerian Railway Corporation (NRC)  owns, operates, and maintains the railways, 
which are currently in a poor state due to a vicious  circle of years of underinvestment, leading to poor 
services and low sales, leaving less money for maintenance. 
98. Under the Draft National Transport Policy, the objective for the railways is not only to 
rehabilitate existing system but also to extend th e network, including a high-speed link between Abuja 
and Lagos.  There are also plans for rail-based mass- transit systems for Lagos and Abuja.  Achieving 
these goals will need considerable resources but some progress is being made. 
99. In 2009, the Nigerian railway modernization project was restarted;  a contract was awarded 
for the construction of a single track railway from Abuja to Kaduna and is to be awarded for a double 
track from Lagos to Ibadan.  Both projects are being funded by concessionary loans from China 
                                                     
 
60 Nigeria, Benin, Togo, Ghana, Ivory Coast, Libe ria, Sierra Leone, Guin ea, Guinea-Bissau, the 
Gambia and Senegal. 
61 African Development Bank (2003). 
62 EIU (2010a). Nigeria WT/TPR/S/247 
 Page 65 
 
 
EXIM Bank.  The rehabilitation of the western track (Lagos-Kano) is also nearly completed and is 
expected to become operational in May 2011.  A ccording to the authorities, progress is also being 
made on the privatization of the NRC. 
(c) Maritime transport and port operations 
100. The Federal Ministry of Transport is responsible  for maritime transport policy.  The Nigerian 
Maritime Administration and Safety Agency Act, 2007 established the Nigerian Maritime 
Administration and Safety Agency (NIMASA), whic h replaced the National Maritime Authority and 
the Joint Maritime Labour I ndustrial Council in August 2006.63  NIMASA is responsible for 
implementing the Merchant Shipping Act, 2007 and an y regulations made under it by the Minister of 
Transport.  The Act provides for the registration, licensing, and marking of ships in Nigeria and for 
the carriage of dangerous goods and prevention of pollution.64   
101. According to the Nigerian Maritime Administ ration and Safety Agency Act, NIMASA is 
funded by a 3% charge on earnings from internati onal cargo, a 0.5% charge on stevedoring services, 
and fees charged for registration, licensing, surveys, etc., of ships.  Some of these charges go towards 
funding the Maritime Fund and the Maritime Academ y.  All individuals and companies working in 
commercial shipping, on offshore platforms, or pr oviding related services like stevedoring must be 
registered with the NIMASA.  NIMASA is also require d to maintain a register of ships and to ensure 
safety standards are met. 
102. The Nigerian Shippers Council was set up by Decree 13 of 1978 (now Law of the Federal 
Republic of Nigeria Cap. 133 of 2004) to provide a forum for Nigerian shippers and to advise the 
Federal Government on shipping matters, such as fre ight rates, shipping space, frequency of sailings, 
port charges, etc.  The Council also operates the Cargo Defence Fund to provide legal aid to shippers and was responsible for conducting a study on in land container depots and freight stations. 
103. The Nigerian Ports Authority owns the ports a nd is responsible for planning and development 
of infrastructure;  leasing and concession agreements with the port operator; nautical services;  and 
regulatory responsibilities in ports.  The Nigerian Na tional Shipping line was the national carrier but, 
according to the authorities, ceased operations some  time ago and the private sector now dominates 
ocean shipping in Nigeria. 
104. For many years, the objective of national polic y has been to increase the participation of 
domestically owned ships in international trade.  Under the 1987 decree establishing shipping policy, 
foreign participation in shipping is limited and domestic shipping lines have exclusive rights to carry 
at least 40% of Nigeria's sea-borne trade, in line with the UNCTAD Code of Conduct for Liner 
Conferences.  Furthermore, 50% of Nigeria's oil exports must be carried by vessels flying the Nigerian flag.  The Nigerian Coastal and Inland Shipping (Cabotage) Act, 2003, introduced a cabotage shipping regime with waiver provisions that allow foreign firms to engage in coastal 
shipping in the event that Nigerian firms lack the required capacity, and the Cargo Defence Fund has 
been set up to protect the interest of indigenous shippers.
65   
                                                      
63 Nigerian Maritime Administration and Safety Agency  Act, 2007.  Viewed at:  http://faolex.fao.org/ 
docs/pdf/nig92403.pdf [January 2011].  
64 Merchant Shipping Act, 2007.  Viewed a t:  http://faolex.fao.org/ docs/pdf/nig92406.pdf 
[January 2011]. 
65 The Coastal and Inland Shipping (Cabotage) Act,  2003.  Viewed at:  http://faolex.fao.org/docs/ 
pdf/nig61610.pdf [January 2011]. WT/TPR/S/247 Trade Policy Review 
Page 66 
 
 
105. These measures have not been successful.  The Draft National Transport Policy noted that 
only a small proportion of cargo from and to Nigeria is shipped on Nigerian registered ships, and 
trade depends almost entirely on fo reign shipping lines.  Nevertheless,  the policy tries to achieve the 
same objective by putting in place monetary an d fiscal policies, including tax relief and tax 
concessions, to support the objective.66  
106. The port system comprises 6 major ports, 22 oil terminals, and 62 private jetties, handling 
about 70 million tonnes of cargo.  Lagos (Apapa a nd Tin Can Island port complexes) is the largest, 
handling about 50% of total cargo (excluding crude oil)  and 85% of container a nd vehicle traffic.  The 
state-owned Nigerian Ports Authority (NPA) owns all ports and all equipment in them.    
107. The Government has recognized the problems fa cing the ports system and has taken several 
steps to reform the system.  Among the various mode ls of port management tried, the landlord model 
emerged as the preferred one, and 26 concession agre ements are currently operating in six ports.67  
Under the landlord system the existing port termin als are leased to a privat e company with concession 
periods of 10 or 25 years.  The private company takes on responsibility for terminal operations, employment of port labour, land-based investment, and maintenance of infrastructure and equipment, 
and may undertake new investment.  The NPA reta ins responsibility for planning and development, 
regulatory tasks (such as safety, security, and protection of the envir onment), and nautical 
management.   
108. Significant reform is still needed in the ports to improve efficiency and reduce the cost of 
cargo handling.  The shift to private-sector ope ration of ports under concession agreements would 
benefit from an independent regulator but the draf t Port and Harbours Bill is currently before the 
National Assembly.  When passed, the regulatory aut hority will have to be established and start its 
work, which means it may take some time before an effective regulator is in place.  Furthermore, 
despite progress in improving efficiency in the ports, high costs and poor facilities mean that ports in 
neighbouring countries and overland transport into Nigeria are often used rather than importing 
directly into the country.  There has been some improvement since 2006, as both turn-around time and 
waiting time of vessels has declined (Table IV.12), a nd the time taken to export a standard container 
has been reduced from 41 days to 24 days and to import a standard container from 53 days to 
39 days.
68  
Table IV.12 
Ports performance, 2005-10 
  2005 2006 2007 2008 2009 2010 
Number of vessels no. 3,692 3,689 4,050 4,477 4,620 4,962 
Cargo throughput tonnes 44,952,078 46,150,518 54,641,048 65,192,919 66,908,322 74,910,284 
Turn around time days 7.4 5.3 5.6 5.0 6.7 5.9 
Waiting time of vessels days 2.6 1.1 1.3 1.13 2.1 1.1 
Note: Excludes crude oil. 
Source: Information provided by the Nigeria Ports Authority. 
(d) Air transport 
109. Air transport policy is the responsibility of the Ministry of Aviation.  The Nigerian Civil 
Aviation Authority (NCAA) provides services related to aviation safety and economic regulation.  It 
                                                      
66 Federal Government of Nigeria (2010). 
67 Lagos Port, Tin Can Island, Port Harcourt , Delta Port, Onne Port, and Calabar Port. 
68 World Bank online information.  Viewed at:  http://www.doingbusiness.org/. Nigeria WT/TPR/S/247 
 Page 67 
 
 
was established by the Civil Aviation Act, 2006.  The Act also provides for a 5% levy on air tickets, 
charter and cargo sales, which is paid to the NCAA  and funds its activities as well as those of the 
Nigerian Airspace Management Agency AMA, the Nigerian Meteorological Agency, the Nigerian 
College of Aviation Technology and th e Accident Investigation Bureau.69  The NCAA also collects 
other fees for licences, certificates, and other charges related to civil aviation.  
110. The Federal Airports Authority of Nigeria (FAAN)  is responsible for maintaining facilities at 
Nigeria's airports and for upgradin g the facilities to international civil aviation standards.  The 
Nigerian Airspace Management Agency (NAMA) wa s established to meet international requirements 
for safe and economic air navigation. 
111. In international terms, air transport to, from, and within Nigeria of passengers and freight is 
relatively small with a total of 167 million tonne-ki lometres for passengers, freight, and mail.  This 
puts it sixth in sub-Saharan Africa, after South Africa, Ethiopia, Kenya, Mauritius, and Namibia.70  
Air traffic has grown since 2006.  Although number of aircraft movements for international traffic 
have declined relative to 2005, the number of pa ssengers has increased, reflecting greater and more 
efficient use of larger aircraft (Table IV.13). 
Table IV.13 
Air traffic data, 2004-09 
(number) 
 2004 2005 2006 2007 2008 2009 
Total movements       
    Domestic 173,568 148,959 148,618 147,288 164,421 188,649 
    International 19,514 39,906 33,304 30,339 28,407 32,623 
Passenger traffic       
    Domestic 6,194,061 6,171,141 5,880,152 5,667,792 7,863,503 9,513,738 
    International 1,963,091 2,124,677 2,311,326 2,742,152 2,966,069 3,012,726 
Cargo (kg) .. 77,286,904 93,248,313 .. .. .. 
.. Not available. 
Source:  Derived from Federal Airports Authorit y of Nigeria, Data and Statistics.  Available at:  http://www.faannigeria. 
org/statistics.php [January 2011]. 
112. The FAAN owns and operates 22 airports, 4 of which are classed as international airports71, 
7 as major domestic airports72, and 11 as "other" domestic airpor ts.  Under the Federal Airports 
Authority of Nigeria Act, 2004, the FAAN is respons ible for the maintenance of existing facilities and 
the construction of new ones, carrying out all economic activities in the airport (itself, through an agent or in partnership), and providing security and other airport-related services.  The FAAN has 
been pursuing a policy of public-private partners hips through concession agreements with airport 
service providers.
73  The Murtala Mohammed Airport in Lagos is currently under a build-operate-
                                                      
69 The Civil Aviation Act, 2006.  Viewed a t:  http://www.ncaa. gov.ng/ index.php?option=com 
_content&view=article&id=82&Itemid=37. 
70 ICAO (2010). 
71 The international airports are:  Murtala Muhammed International Airport, Lagos; Njamdi Azikwe 
International Airport, Abuja; Mallam Aminu Kano Inte rnational Airport; and Port Harcourt International 
Airport. 
72 The major domestic airports are:  Kaduna Airport; Enugu Airport; Margaret Ekpo International 
Airport, Calabar; Maiduguri Airport; Sultan Saddik Abubakar Airport, Sokoto; Yakubu Gowon Airport, Jos; 
and Yola Airport. 
73 FAAN online information.  Viewed at:  http ://www.faannigeria.org/index.php [January 2011]. WT/TPR/S/247 Trade Policy Review 
Page 68 
 
 
transfer arrangement with the Bi Courtney Consortium.74  In 2009, four domestic airlines started new 
domestic routes.   
113. Improvements in security in Nigeria's internati onal airports in 2009, including the installation 
of body scanners in Lagos and A buja, helped these two airports to pass the ICAO and the U.S. 
Transport Security Administration audits.  However, concerns continue with standards of air traffic 
control.75  Since 2007, airport and airline services have  been gradually reformed and liberalized.  
However, concerns remain about high costs resulting from double taxation, excessive duties on 
aircraft engines and aircraft, and airport charges by FAAN, NAMA and NCAA.76 
114. All nine domestic airlines operating in Nigeria ar e privately owned;  some have started to 
provide scheduled services on international routes.  Air Nigeria, the national carrier, was formerly 
Virgin Nigeria Airways and is still 49% owned by Virg in Atlantic and 51% by institutional investors.   
115. Nigeria is a party to the Yamoussoukro Decisi on which, in theory, provides for up to fifth 
freedom rights among practically all countries in  Africa.  However, implementation of the 
Yamoussoukro Decision has been slow.77  Nigeria is also a party to the Banjul Accord, which also 
provides for up to fifth freedom rights among West African countries and, in January, 2004, Nigeria 
signed the Multilateral Air Services Agreement. 
116. Nigeria is a category II member of the ICAO, that is, it provides navigational facilities at its 
international airports to comply with the ICAO St andards and Recommended Practices.  It is also a 
member of the African Civil Aviation Commission.  Since 2005, Nigeria has signed agreements with 
Ethiopia, the Gambia, Cape Verde, Ghana, Liberia,  and Burkina Faso but it has not been possible to 
verify details of these agreements. 
(ii) Telecommunications 
117. Under the GATS, Nigeria has no restrictions on telecommunications services, except cross- 
border supply and consumption abroad of mobile services.78  The Ministry of Communications is 
responsible for policy and legislation.  Under the Telecommunications Act, 2003, the Nigerian 
Communications Commission (NCC) was established as an independent agency responsible for most 
aspects of policy implementation, including:  regulating the sector;  granting licences, and fixing and 
collecting associated fees;  approving charges set  by licence holders; monitoring and enforcing the 
terms and conditions of licences;  setting and enforc ing technical specifications and standards; and 
advising the Minister on policy.  The Telecommunications Act also requires operators to provide for interconnections when requested by other operators with interconnection agreements registered with 
the NCC, which also acts as an arbitrator in cases of dispute.  
118. The NCC is also responsible for implementi ng the National Radio Fr equency Management 
Policy.  Under the Policy: 
 - the Ministry of Communications re tains overall responsibility for policy and 
 international cooperati on and coordination;  
                                                     
 
74 EIU (2010a). 
75 Central Bank of Nigeria (2010), p. 136. 
76 Central Bank of Nigeria (2010), p. 136. 
77 Demuren (2007). 
78 WTO document S/DCS/W/NGA, 19 August 2004. Nigeria WT/TPR/S/247 
 Page 69 
 
 
- the National Frequency Management Council (NFMC) is to keep a National Master 
Register of Frequency, allocate bulk frequency to the official agencies responsible for managing the frequency spectrums (for exam ple for broadcasting and mobile phone, 
etc.), publishing frequency allocation and use tables, and advising Government;  
- the NCC has the functions of planning, managing, and monitoring the use of the 
frequency spectrum assigned to it as well as assigning frequencies to non-governmental users (except for broadcasting);  and 
- the National Broadcasting Commission has a similar role in broadcasting as the NCC 
has in communications.
79  
119. In order to operate a mobile service, operators  require two licences:  an operational licence, 
which is processed and granted administratively;  and a spectrum licence, which is granted following 
an auction, a selection process, a public tender inv itation or a competitive bidding process.  In 2006, 
the NCC introduced the Unified Access Service Licen se, which gives the holder the right to provide a 
number of services under a single licence, including digital mobile, fixed line, long distance, and 
gateway services. 
120. Since the previous Trade Policy Review of  Nigeria in 2005, telecommunications has 
continued to expand, averaging annua l growth of 32% in real terms in the 2005-09 period.  The total 
number of active lines has increased from less th an 1% of the populatio n in 2001 to 63%, or 
88.3 million, by end 2010.  Competition in the mobile  sector is intense as the number of operators 
increased from 4 in 2004 to 9 in 2009 (Table IV.14) .  MTN Nigeria (part of the South African based 
MTN Group), Globacom of Nigeria, and Zain (controlle d by Bharti Airtel of India) account for about 
86% of the mobile market while EMTS and M-Tel account for the rest.  At the same time CDMA 
operators, Visafone, Starcomms, Multi-Links, and Zoom  Mobile, are expanding into the mobile phone 
market.80 
121. In contrast with the rapid growth in mobile  phones, the number of fixed lines has grown much 
more slowly and penetration remains very low.  Most fixed lines are actually provided by fixed-
wireless operators using CDMA technology.  The national carrier, Nigerian Telecommunications Ltd 
(Nitel) was privatized in August 2006 when Tr ansnational Corporation of Nigeria (Transcorp) 
acquired a 51% stake in the company for N 63 billion  but the sale was revoked in June 2009 by the 
National Council of Privatisation on the grounds that Tr anscorp had failed to meet  the terms of sale.  
Globacom, the other fixed-line operator in Nigeria, has networks in four cities.81  It has also invested 
in the fibre-optic submarine cable, Glo-1, which runs from Lagos across 16 other African countries to 
Portugal, Spain, and the United Kingdom.  Glo-1 jo ins the SAT-3/WASC, in which Nitel has a 8.39% 
stake, as the second submarine cable servicing Nigeria. 
122. Interconnection rates were last set by the NCC at the end of 2010 for mobile and fixed voice 
services and SMS terminations irrespective of the originating network.   
123. Investment in telecommunications continues to increase.  It reached US$18 billion in 2009, of 
which, US$12 billion was foreign direct investme nt.  At the same time the average revenue per 
                                                      
79 NCC online information.  Viewed at:  http://www.ncc.gov.ng/ [January 2011]. 
80 EIU (2010c), p. 8. 
81 Lagos, Ibadan, Port Harcourt, and Abeokuta. WT/TPR/S/247 Trade Policy Review 
Page 70 
 
 
subscriber (ARPS) has been declining as tariffs are reduced and the number of users has increased 
(Table IV.14).82   
Table IV.14 
Telecommunications data, 2004-09  
(number unless otherwise stated) 
 2004 2005 2006 2007 2008 2009 
Fixed lines  ('000) 1,120 1,223 1,673 1,580 1,308 1,419 
Mobile lines ('000) 9,200 18,590 32,320 55,240 62,990 73,100 
National carriers 2 2 2 2 2 2 
Operating ISPs 40 69 117 117 83 .. 
Active licensed fixed line operators 17 26 26 29 20 22 
Licensed mobile operators 4 4 4 4 9 9 
Average Revenue per Subscriber (US$) 29.94 17.80 13.65 12.12 11.26 7.66 
Investment  (US$ million)  6,000 7,500 8,150 11,500 12,000 18,000 
.. Not available. 
Source: Central Bank of Nigeria Annual Reports and Pyramid Research. 
124. Internet use in Nigeria has grown rapidly over  the past few years, from about 5 million users 
in 2005 to nearly 24 million in 2008.  However, this represents a relatively small proportion of the 
population and reflects the poor state of the fixed-lin e networks and the low availability of broadband 
connections as well as their high cost.  The demand is clearly there to be tapped if the infrastructure 
can be improved, as most of the banks offer onlin e banking services and VoIP already carries the bulk 
of international voice traffic.    
125. A Universal Service Provision (USP) Fund was set up under the 2003 Act and became 
operational in August 2006 with the objective of  providing information and communications 
technology for all at prices affordable to the greater part of the population.83  The Fund is supported 
by contributions from the NCC, based on licence fees paid to it and from the Federal Budget.  
According to the authorities, project proposals can come from the USP Fund secretariat or from other 
sources and must meet established criteria, such as  the project being based in an area or for a 
community that has no access or limited access to  communications technology.  Projects can be 
funded through grants and subsidies th rough public-private partnerships. 
(iii) Financial services 
126. The Nigerian financial system has undergone c onsiderable reform and consolidation during 
the period under review;  the number of deposit bank s has fallen from 89 to 24, while new financial 
stability requirements have been imposed and the regulators have conducted audits.  In addition to 
deposit banks there are 5 discount houses, 866 mi crofinance banks, 101 finance companies, 
101 primary mortgage institutions, 5 development fi nance institutions, 2,000 bureaus de changes and 
52 insurance companies. 
                                                      
82 Pyramid Research (2010). 
83 Universal Service Provision Fund online info rmation.  Viewed at: http://www.uspf.gov.ng/ 
index.php?categoryid=1 [April 2011]. Nigeria WT/TPR/S/247 
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(a) Banks 
127. Under the GATS, Nigeria bound, without lim itation, cross-border supply and commercial 
presence for banking and other financial services (ex cept insurance).  Foreigners, corporations or 
individuals, may own up to 100% equity in any enterprise.84 
128. The Central Bank of Nigeria (CBN) is an aut onomous entity responsible for monetary, credit, 
and exchange-rate policies and fo r regulating the financial sector.  The CBN was established under 
the Central Bank of Nigeria Act, 1958 and its activiti es are now governed by the new CBN Act, 2007.  
The CBN's main objectives are:  ensuring monetary and price stability; issuing legal tender; maintaining external reserves; regulating the fina ncial system; and acting as banker to the Federal 
Government.  The Central Governor of the CBN is also involved in policy making as he is a member 
of the Economic Management Team, which is chaired by the Minister of Finance and he is also a 
member of the National Economic Council which in cludes the State Governors, the Minister of 
Finance, and the Minister of National Planning.  Th e Central Bank and the Ministry of Finance jointly 
produce the country’s Financial Policy and Programm e, for IMF Article IV Consultations.  The 2007 
Act also permitted the CBN to enter information-sh aring agreements with foreign authorities; to 
develop an electronic payment systems; and to license and regulate credit bureaus.   
129. All financial institutions require a licence gran ted by the CBN, which also has the right to 
revoke licences.  To obtain and retain a banking  licence, all banks must implement the CBN 
prudential requirements, based on Basel II.  The CBN has also established a committee to plan for the 
implementation of Basel III.  In October 2010, the CBN stopped issuing universal banking licences 
and reverted to a system of issuing a different  licence and different minimum capital requirements 
depending on the type of financial service provided. 
130. Each bank is also required to regularly provide the CBN with data to show it is meeting these 
requirements.  Bank transactions are monitored by the CBN through the enhanced Financial Analysis 
and Surveillance System (e-FASS).  In addition,  in 2006 the CBN issued the Code of Corporate 
Governance in Post-Consolidation Nigeria on cor porate governance in the banking sector, which built 
on its Code of Best Practices for Public Compan ies introduced in 2003 for all public companies, 
including banks.  In early 2010, the CBN issued  guidelines on the minimum information banks are 
required to provide in their financial statements.   
131. Under the Money Laundering (Prohibition) Act, 2004, all designated fina ncial institutions are 
required to report to the Nigerian Financial Intelligence Unit, under the Economic and Financial 
Crimes Commission, all large withdrawals (N
1 million for individuals and N 5 million for companies) 
or foreign-exchange transactions over US$10,000. 
132. The Nigeria Deposit Insurance Corporation ( NDIC) was established in 1988 following the 
liberalization of banking services.  The NDIC main tains the Deposit Insuran ce Fund for deposit banks 
and the Special Insured Institutions Fund for othe r deposit-taking financial in stitutions, like the micro-
finance banks and primary mortgage institutions.  Pa rticipating financial institutions are required to 
pay premiums based on the total deposit liabilities fo r the preceding calendar year.  In 2008, the NDIC 
changed the premium assessment system from a flat rate system to a differential rate system to take account of the different risks of different institutions. 
133. The fall in the number of deposit banks from 89 in 2004 to 24 in 2006 was the direct result of 
the Central Bank's decision to increase the minimum reserve requirement from N
2 billion to 
N25 billion with effect from January 2006.  As a result, 14 became insolvent and their licences were 
                                                      
84 WTO document S/DCS/W/NGA, 19 August 2004. WT/TPR/S/247 Trade Policy Review 
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revoked, 69 banks were part of mergers that resulte d in 19 new banks, and 6 were able to meet the 
new capital requirements without merging.  In Se ptember 2007, a further merger between two banks 
took the number of deposit banks to 24.   
134. In 2009, following an audit by the Central Bank, it emerged that 11 deposit banks had serious 
problems with bad debts and, by end 2010, requi red a capital injection of US$4.2 billion from the 
Central Bank.85  The Asset Management Corporation of Nigeria (AMCON) was set up in July 2010 to 
acquire the non-performing loan s of these banks.  By end 2010,  AMCON had acquired bank assets 
with a book value of N 1,036 billion at N 770 billion.  Eight deposit banks in which the CBN 
intervened did not meet the 10% CAR set for al l banks, while the industry average non-performing 
loans were 15.3% of total loans against a 5% limit se t by the CBN.  The banking crisis is estimated to 
have cost the country US$10 billion.  The CBN h as overseen the change in management of the 
affected banks, and the National Assembly h as passed the Asset Management Corporation Act.86   
135. In September 2010, it was reported that the Ce ntral Bank had reversed previous policy of 
barring foreign takeovers of domestic  banks and would be prepared to  sanction foreign takeovers of 
up to 100% ownership, although it would prefer any foreign investment to be in shared ownership 
with a Nigerian bank.87  As of end-March 2011, there were four foreign banks incorporated and 
operating in Nigeria:  Stanbic/IBTC; Standard Charte red; City Bank;  and Ecob ank International.  All 
banks in Nigeria must be incorporated in the country and branches of foreign banks may not operate. 
136. The CBN also regulates the state-owned Fede ral Mortgage Bank of Nigeria, which is 
responsible for regulating and licensing the prim ary mortgage institutions.  The National Housing 
Fund, financed partly by a 2.5% levy on salaries in Nigeria, was created by the National Housing 
Fund Act, 1992, to support the primary mortgage institutions. 
137. In addition to the deposit banks, there are 806 micro-finance banks (MFBs), and 10 deposit 
banks operate micro-finance banks as subsidiaries.  In 2005 the CBN required all community banks to 
convert into micro-finance banks by end-200 7, which required an increase in capital from N 5 million 
to N20 million.  A total of 298 community banks failed to convert.  Of the 606 community banks that 
had converted by end 2009, 438 had full licences wh ile 168 had provisional approval.  In addition, 
222 new investors had new licences and 83 had approval in  principal.  Only three micro-finance banks  
have foreign ownershi p or participation.88 
138. Although the financial sector has grown strongly since 2003, averaging nearly 4% per year in 
real terms between 2004 and 2009, the main demand for financial services is from the corporate 
sector.  For most individuals, Nigeria is mostly a cash-based economy and is likely to remain so for 
some time.89  Although most banks now offer online a nd/or mobile-phone based services and the 
number of point-of-sale terminals for credit and debit car ds is increasing, confidence is still lacking.   
(b) Insurance 
139. Nigeria's commitments under GATS cover all insura nce services.  Under the Insurance Act of 
2003, insurance businesses are classifi ed as either life or general and each insurance company must be 
                                                      
85 EIU (2010d). 
86 World Bank online information, Nigeria:  Country Brief.  Viewed at:  http://web.worldbank.org/ 
WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/NIGER IAEXTN/0,,menuPK:368906~pagePK:141132~piP
K:141107~theSitePK:368896,00.html [January 2011]. 
87 EIU (2010d), p. 11. 
88 Central Bank of Nigeria (2010), p. 58. 
89 EIU (2010), p. 9;  and the Nigerian authorities. Nigeria WT/TPR/S/247 
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registered with the National Insurance Commission (Naicom).  The Act also sets out capitalization 
requirements for insurance companies;  qualifica tion requirements for establishing an insurance, 
reinsurance, insurance broker or loss adjuster bus inesses; minimum times for insurance brokers to pay 
premiums to insurance companies; and activities and assets requiring compulsory insurance.   
140. All imports into Nigeria are to be insured lo cally by insurance companies registered in 
Nigeria.  An insurance broker must obtain approva l before entering into a contract with foreign 
insurers.  Insurance companies must invest and hold Nigerian assets, at least equivalent to the amount 
of insurance business transacted in Ni geria.  The establishment of a reinsurance company in Nigeria is 
subject to approval by the Naicom, with the possibility of appeal to the Minister of Finance.  Insurers 
are required by law to cede 30% of their business compulsorily to Nigeria Reinsurance Corporation 
before ceding any reinsurance business outside Nigeria, subject to approval from Naicom.90 
141. Naicom is responsible for regulating the insura nce industry and for maintaining the Insurance 
Special Supervisory Fund, contributions to whic h are mandatory at the rate of 1% of annual 
premiums.  The National Insurance Supervisory Bo ard was transformed into Naicom under Decree 
Number 1 of 1997.  In September 2005, Naicom introduced new capitalization requirements for 
insurance companies at N 2 billion for life insurance, N 3 billion for general insurance, N 5 billion for 
composite insurance, and N 10 billion for reinsurance.  The new capitalization requirements took 
effect from end-February 2007 and, partly as a r esult, the number of certified insurance companies 
declined from over 100 to 52, of which about 8 comp anies are non-Nigerian;  there are an additional 
3-5 applications from other non-Nigerian companies with Naicom.   
142. In September 2009, in an attempt to improve  confidence in insurance companies, Naicom 
announced that it wanted to see improved settlement  of claims and a unit was set up to address 
complaints.  According to the authorities, most clai ms are now settled promptly.  One reason for slow 
settlement was outstanding premiums owed by insura nce brokers to insurance companies, which, at 
an average of 50% of total premiums, was a seri ous problem for insurers despite the 30-day legal 
requirement under the 2003 Insurance Act for insura nce brokers to pay unde rwriters.  Naicom has 
also started to implement the Nigeria Insurance Market Development and Restructuring Initiative, 
which  aims to improve the insurance agency system , reduce fake insurance, and introduce a risk-
based supervision system. 
143. The Initiative is also trying to improve enforc ement of compulsory insurance categories.  
There are six categories of compulsory insurance in Ni geria:  builders' liability insurance;  occupiers' 
liability insurance;  healthcare professional indemn ity;  statutory group life insurance;  workers' 
compensation insurance; and third-party motor insu rance.  However, awareness of these statutory 
requirements is very low, as is the percentage of those who actually have the compulsory insurance.  
According to the authorities, they intend to start enforcing compulso ry insurance from end-
April 2011.   
(c) Other financial services 
144. Under the Pensions Act, 2004, all employees of the Federal Government and of private-sector 
enterprises with five employees or more are required to pay 7.5% of their salaries into a pension fund, 
while the employers must contribute another 7.5%.  The scheme applies to state and local government 
employees on a voluntary basis.  Contributions to the pensions of Federal Government employees are 
held in a special account by the CBN and in protected accounts for private-sector employees.  The 
National Pension Commission is responsible for regulating and supervis ing pension schemes, 
licensing pension fund operators, and dea ling with complaints about pensions. 
                                                      
90 WTO document S/DCS/W/NGA, 19 August 2004. WT/TPR/S/247 Trade Policy Review 
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145. Pension assets are ring fenced under Pension F und Administrators, who are responsible for 
administering retirement savings accounts, investing pension fund assets, and administering retirement benefits, and under Pens ion Fund Custodians, who hold the contributions to the pension 
fund and carry out transactions on behalf of the Administrations.  A Closed Pension Fund 
Administrator manages existing schemes for empl oyees of an organization.  The Pension Fund 
Administrators are required to have a paid-up capital of N
150 million and the Pension Fund Custodian 
a paid-up capital of N 2 billion.   
146. Nigeria has one stock exchange, in Lagos, a nd a Security and Commodity Exchange, in 
Abuja.  The Securities Exchange Commission,  Nigeria (SEC) was established as a government 
independent entity in 1978.  Its activities and r esponsibilities are set out in the Investment and 
Securities Act, 1999 and include the regulation of :  stock, securities, derivatives, and commodity 
exchanges; capital market operators;  collective i nvestments; and mergers and acquisitions.  The SEC 
is also responsible for maintaining registers of foreign direct investment and foreign portfolio 
investments, and overseeing Investors' Trade Protection Funds, which capital trade points and securities exchanges are required to establish. 
147. In August 2010, the SEC replaced most of th e senior figures in the Stock Exchange, which 
then appointed an accountancy firm to audit the Excha nge.  It is also intended to demutualize the NSE 
and transform it into a listed company thus enabling new investors to join. 
(iv) Tourism 
148. In 2010, travel and tourism contributed about 0. 6% directly to GDP, or 4% when all related 
activities are included, which is small compared with other countries.  The sector remains 
undeveloped and contributes 2.4% to  total employment and 0.8% to  export earnings, and represents 
2.4% of total investment.  At present about half of tourism is business related but this is projected to 
change in the future as personal travel and tourism grow at a faster rate.
91 
149. Tourism has a lot of potential in Nigeria, which has numerous attractions including historic 
cities, beaches, overland safaris, national parks, game reserves, archaeological monuments, and 
festivals.  However, it also faces numerous cha llenges from poor infrastructure, undeveloped facilities 
and, in some areas, security concerns, although ai r transport and related facilities have improved 
considerably over the past few years. 
150. The Ministry of Culture, Tourism and National Orientation is responsible for policy and, 
through the Nigerian Tourism Development Cor poration (NTDC), for pr omoting and regulating 
tourism in Nigeria.  The NTDC is responsible for registration and classification of enterprises engaged 
in tourism as well as advising state and local  government, and the private sector on tourism 
development.   
151. The Tourism Master Plan was published in 2006,  and tourism is given a high profile in 
Vision 20:2020.  The Master Plan noted several shortcomings with policy and its implementation, 
including:  the ineffectiveness of the NTDC; lack of an industry representative group;  restrictive 
policies on investment in tourism;  problems obtaining investment, including from the Bank of Industry;  lack of data on touris m;  shortcomings in domestic infra structure;  and that the process for 
                                                     
 
91 World Travel & Tourism Council (2010). Nigeria WT/TPR/S/247 
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obtaining visas to visit Nigeria was a real barrier to tourism.  The Plan included a large number of 
recommendations focussed around five clusters92 with seven different flagship projects.93 
152. Implementing the Master Plan would require cons iderable effort by the Federal Government 
to overcome these obstacles to development of a viab le tourism sector.  According to the authorities, 
The Federation of Tourism Associations of Nigeri a (FTAN), which is the umbrella group for several 
tourist related industries, works closely with the Nigerian Tourism Development corporation on 
development of the sector.  
                                                      
92 The clusters were identified as:  Tropical Rainfore st;  Conference Capital;  A tlantic Gateway; Scenic 
Nature;  and Sahara Gateway. 
93 Government of the Federal Republic of Nigeria (2006).