WORLD TRADE  
ORGANIZATION  WT/TPR/M/147 
14 June 2005 
 (05-2491) 
Trade Policy Review Body 
11 and 13 May 2005  
 
 
 
TRADE POLICY REVIEW 
 
NIGERIA 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Don Stephenson (Canada) 
 
 
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF NIGERIA 4  
III. STATEMENT BY THE DISCUSSANT 6  
IV. STATEMENTS BY MEMBERS 9  
V. REPLIES BY THE REPRESENTATIVE OF NIGERIA AND ADDITIONAL 
COMMENTS 15  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 17  
 
 
Note:   Advance written questions by WTO Me mbers and the replies provided by Nigeria are 
reproduced in document WT/TPR/M/147/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. 
  WT/TPR/M/147 
 Page 3 
 
 
 I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of Nigeria was held on 11 and 13 May 2005.  The Chairperson 
(H.E. Mr. Don Stephenson) welcomed the delegation of Nigeria, headed by Mrs. Ogunleye, and the 
discussant Dr. Alexander Gross (Germany).  As us ual, the discussant would speak in his personal 
capacity and, in accordance with established proce dures, had made available in advance a broad 
outline of the themes he intended to raise (document WT/TPR/D/123). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Report by Nigeria was contained in document WT/TPR/G/147 and that of the Secretariat in document WT/TPR /S/147.  Copies of advance written questions, 
submitted by:  Switzerland;  Japan;  Canada;  th e Separate Customs Terr itory of Taiwan, Penghu, 
Kinmen, and Matsu;  the European Communities;  Hong Kong, China;  Brazil;  the United States;  
and the Republic of Korea had been transmitted to th e delegation of Nigeria.  These questions and the 
replies provided by the delegation of Nigeria are reproduced in WT/TPR/M/147/Add.1. 
3. The Chairperson stated that the documentation pr epared for this Review highlighted the steps 
taken by Nigeria to reform its economy.  Nige ria's macroeconomic and structural reforms had 
contributed to an annual average economic growth rate of 4.8% since 1999, up from 3.5% during the 
previous period;  its fiscal deficit had been redu ced from 5.6% of GDP in 2001 to 1.2% in 2003.  
However, difficulties in managing the surge in fo reign assets (as a result of favourable international 
oil prices), together with increases in border prot ection, through tariff and non-tariff measures, had 
maintained inflation high.  This had made Nige ria's trade regime generally more protectionist, 
compared with the period before its last TPR in 1998. 
4. Continued structural and trade reforms, a nd improvement of multilateral commitments on 
goods and services would help Nigeria to further exploit its enormous comparative advantages, 
further diversify its economy away from oil, and ensure compliance with its multilateral 
commitments. 
 WT/TPR/M/147 
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 II. OPENING STATEMENT BY THE RE PRESENTATIVE OF NIGERIA 
5. The representative of Nigeria
 thanked the Secretariat, the Chairperson, and the discussant.  
This was the third Review of Nigeria since the in troduction of the Trade Policy Review Mechanism in 
1989, aimed at contributing to improved adhere nce to the disciplines and commitments of the 
multilateral trading system, and smoothing its fu nctioning by achieving transparency in, and 
understanding of, the trade policies and practices of the Members.  Nigeria shared these objectives, 
which were consistent with its commitment to the principles of the multilateral trading system and the 
adoption of economic and trade reforms to progr essively liberalize its economy.  The TPRM also 
provided important feedback and appr aisal to articulate and chart the future course of its trade policies 
and practices, taking into account the collective ex perience of Members as well as the prevailing 
opportunities and challenges. 
6. Since 1998, Nigeria's economic development a nd performance had remained mixed. Nigeria 
had been under military dictatorship from 1983 to 19 99.  The current challenge was how to positively 
address the problems and distortions, in  all spheres of national life, caused by the military misrule.  In 
this regard, to establish a stable, transparent, a nd sustainable economic environment, the Government 
had embarked on structural reforms since 1999, including, inter alia :  (i) structural reforms to promote 
a more diversified, rule-based market economy with more private sector participation, and to reduce 
State involvement to that of a facilitator;  (ii)  social sector policies aimed at poverty reduction and 
human resource development;  (iii) political reforms aimed at making Nigeria more stable, as well as 
resolving political and constitutional issues to achie ve national unity, peace, and progress;  and (iv) 
promoting transparency and accountability, fiscal discipline, and fighting corruption. 
7. To demonstrate its serious commitment to these reforms and ensure their coordinated 
implementation, the Government had adopt ed the National Economic Empowerment and 
Development Strategy (NEEDS) for the 2003-07 pe riod.  The NEEDS was aimed at reforming the 
way the State worked;  making the private sector the engine of economic growth;  implementing a social charter taking into account education, health , employment, poverty reduction, and security;  and 
value reorientation.  The core economic re forms under the NEEDS included:  achieving 
macroeconomic stability, including significant debt  reduction to create an environment conducive for 
growth and development;  fighting corruptio n and improving transparency and accountability, 
particularly in the oil subsector and government  procurement, by strengthening institutions dealing 
with corruption;  improving governance and institu tions;  undertaking public  expenditure and civil 
service reforms to, inter alia,  improve fiscal discipline, speed-up customs clearance, and re-
professionalize the public service;  and accelerate privatization and liberalization reforms.  The 
Government had established anti-corruption ins titutions and bodies (e.g. the Independent Anti-
Corruption Practices Commission, the Budget M onitoring and Price Intelligence Unit, and the 
Economic and Financial Crimes Commission) to pursue these objectives.  The National Political 
Reforms Conference would soon submit a report on fundamental constitutional issues regarding 
nationhood. 
8. A privatization and deregulation programme was also being implemented.  All existing state 
monopolies in energy, communication, transport, solid minerals, services, and tourism had been 
abolished;  and various state-owned enterprises had been privatized or were at different stages of 
privatization.  In agriculture, the Government  had established irrigation schemes, and adopted 
programmes to revive the sector, especially in the production of crops (e.g. cassava, rice, fisheries, 
livestock, vegetable oils, and tree crops) to achieve  food self-sufficiency, and to reduce rural poverty.  
The capital base of commercial banks had also been  increased to ensure that agriculture would 
contribute more meaningfully to the economic deve lopment.  While the Gove rnment's commitment to 
the ongoing reforms remained firm and unwavering,  Nigeria would also appreciate assistance and 
support from its partners to assure their success and sustainability, through increased inflows of FDI 
and debt cancellation.  WT/TPR/M/147 
 Page 5 
 
 
 9. The representative referred to concerns expressed by Nigeria's trading partners on some of its 
trade policy measures to address development challeng es, in particular impor t prohibitions.  Nigeria 
was working bilaterally with its partners to fully resolve these issues, which were essentially 
temporary.  Their eventual elimination had commenced:  a new finalized tariff structure would be published shortly;  and Nigeria had adopted the UEM OA tariff structure within the framework of the 
ECOWAS common external tariff (CET).  Nigeria was committed to the objectives and priorities of 
the ECOWAS and the New Partnership for A frica's Development (NEPAD) programme.  
10. The representative reiterated Nigeria's request for the continued support and understanding of 
Members, as these measures had been necessitated by the significant decay  in institutions and the rule 
of law arising from military rule.  The Governme nt's efforts would actualize the 2007 transition 
deadline, even though the process had been beset w ith special difficulties regarding legislative rule-
making due to Nigeria's young democracy.  However,  the Government expect ed that the transition 
period would allow enough time to enact all the n ecessary legislation with a view to providing a 
transparent, rule-based mechanis m to enforce appropriate trade remedies and border measures, 
including IPRs. 
11. The representative reaffirmed Nigeria's commi tment to the WTO principles and objectives, 
and assured Members that Nigeria would continue to  play a positive and constructive role in the 
WTO, including in the ongoing negotiations in whic h it expected a pro-development result that would 
significantly improve the living standards of all.  She assured Nigeria's trading partners that their 
concerns on some of Nigeria's trade policies (especially the import bans) were being addressed.  Nigeria's ongoing structural reforms in the economic, political, and social fields were real, and would 
be sustained to make the economic environment more conducive to business and improve the living 
standards of Nigerians.  Nigeria counted on the s upport of the international community to make its 
current reforms successful. WT/TPR/M/147 
Page 6  
 
 III. STATEMENT BY THE DISCUSSANT 
12. The discussant
 complimented the Secretariat for its report, and Nigeria for its efforts to 
implement economic and social re forms, based on the NEEDS.  Decisive actions had already 
produced positive results:  (i) the Government had stabilized the economy and considerably reduced 
inflation over the last year;  (ii) urgently need ed reforms in the civil service, banking sector, and 
customs administration had been launched, but would n eed to be continued;  and (iii) the fight against 
economic crime and corruption was moving forward, and had already produced encouraging results.  
When discussing the more difficult aspects of Nigeria' s development, it was important to keep this 
good news in mind.  The discussant pointed out that the TPR should clearly encourage and support the Government to continue on this reform path for higher sustainable growth, based on structural 
change and poverty reduction. 
13. The discussant highlighted two characteristics.   Firstly, Nigeria was an extremely rich 
country, but had suffered from serious poverty and gr ave development problems.  It was the world's 
fifth largest oil exporter, and had large natural gas reserves that it had just begun to exploit.  It was 
richly endowed with various important minerals a nd fertile land, and water resources that could be 
used for profitable farming and tourism.  It ha d the largest population in Africa, which was an 
important source for growth and de velopment.  Despite its huge poten tial, about 70% of its population 
lived on less than US$1 a day, income per capita was very low, and its UNDP ranking was worrisome.  The inability to convert natural wealth in to prosperity pointed to the paramount need for 
internal reforms.  Closing the gap between huge  potential and actual performance was Nigeria's key 
challenge.  
14. Secondly, Nigeria was extremely oil-dependent .  Oil accounted for over 90% of its exports 
and 80% of its revenue, and received the major sh are of FDI, but it employed only 5% of the 
workforce.  This showed that living standards a nd development already relied mainly on increases of 
productivity and employment in the non-oil subsector, and they would do so even more when the 
income stream from oil resources diminished.  This implied that:  (i) economic policy had to focus 
strongly on fostering development and competitiveness in agriculture, services, and manufacturing;  
and (ii) current richness in oil had to be used as efficiently and prudently as possible to lay the 
foundation for an overall positive development process.  To attain these structural challenges, trade 
policy should not be discussed in isolation or with rega rd to single measures, but had to be part of an 
overall reform and development st rategy aimed at getting fundamentals right, and setting the signals 
for efficiency, productivity, and social balance. 
(i) Macroeconomics  
15. One prerequisite for sustainable growth and development was macroeconomic stability.  In 
the past, GDP growth had been driv en by world oil prices:  high oil prices meant high export income, 
high revenues, and, frequently, higher fiscal spendi ng.  This connection ha d been supported by a 
monetary policy that had provided the necessary financ ial leeway for fiscal spending, and had tried to 
prevent the rise in the exchange rate.  This oil-driv en circle of fiscal and monetary policy had resulted 
in a destabilizing boost-and-bust cycle for the economy and double-digit inflation rates, which reduced real income (especially for the poor) and worked against poverty reduction.  Breaking this 
cycle was essential to regain a reliable founda tion for economic activity and poverty reduction. 
16. It was commendable that the Government had brought inflation rate  down in 2004, but there 
was still the question of sustainability.  For example, it was extremely difficult to gear monetary 
policy toward exchange rate and price stability at the same time.  Therefore, more exchange rate 
flexibility and greater political independence for the Central Bank might be desi rable to allow reliable 
control of the monetary base and more stable pri ces, conducive to investment  and poverty reduction.  
This approach might conflict with the decision to  establish a West African monetary zone with a  WT/TPR/M/147 
 Page 7 
 
 
 common central bank and a single currency.  Th is far-reaching monetary  integration amongst 
ECOWAS anglophone members was due to be completed in June 2005.  Considering Nigeria's oil-driven exchange rate and its recent success in figh ting inflation, the discussant asked whether the right 
time for this far-reaching monetary integration had already come, and how Nigeria viewed its 
advantages and risks.  
17. The introduction of a new and prudent fiscal ru le in 2004 was commendable. For the first 
time, in 2004, the Budget had not been based on actual oil revenues but on a lower, conservative 
assessment of the oil price, which was sustainable in the medium run.  The rule set aside windfall 
profits in times of rising prices and used the savings  in bad times.  However, the question remained 
whether the 2004 savings success could be maintained in the future, in particular whether Nigerian 
states, to which a large part of the oil income had to be transferred, would agree to work continuously 
on this more solid basis.   
18. Norway, another WTO Member, was facing a similar oil challenge.  It had had set aside fiscal 
income from oil in a State Petroleum Fund to buil d up a reserve for future expenditures, and to 
guarantee intergenerational fairness.  As controlled use of oil wealth on a long-term sustainable basis 
would be important for transparency, stability, and poverty reduction, the discussant was wondering 
whether the Norwegian example could be of any use to  Nigeria.  An additional benefit might also be 
that, if oil income accrued in U.S. dollars, a petr oleum fund would isolate the exchange rate from oil-
induced influences, and thus make it easier to opt for more exchange rate flexibility. 
19. Another important structural issue in Nigeria's fiscal policy was the role of State.  The share 
of public consumption in GDP had increased from 10% in 1997 to almost 30% in 2003, whereas the 
share of private consumption had declined from 70% to around 40%.  These resources had not been 
used for investment (the share of public investment  in GDP had declined), but for consumption (e.g. 
civil service wages, support to public enterprises, and subsidies).  In terms of structural reforms and 
poverty reduction, political priorities should be rebala nced between the private and the public sector, 
and between investment and consumption spending within the public sector.   
(ii) Structural reforms 
20. Structural reform challenges were at two leve ls.  Firstly, it was essential to further improve 
the framework conditions to strengthen the b asic foundation for increased economic activity and 
confidence.  Enforcing the rule of law, ensuring public security, more transparency and accountability 
of the public sector, and decisive action against corruption were key to further progress.  This seemed one of the centrepieces of the Government's current reform agenda, including independent audit of the 
oil subsector, and the establishment of the Econom ic Crimes Commission and the Corrupt Practices 
Commission.  Further active engagement in these ar eas would be central to reviving the economy.  
The discussant asked Nigeria to elaborate on the success achieved so far.  Secondly, it would be 
crucial to encourage structural change within the private sector to mobilize Nigeria's advantages.  
Competition as a driving force for efficiency, prices that reflected market conditions, and incentives to 
increase investment and productivity across all sector s, were important to lift income levels, and 
reduce poverty on a sustainable basis.  Since it was difficult to address all th ese issues at the same 
time, careful sequencing of the reform steps was justified and necessary to avoid overburdening the 
adjustment capacity, and to include everyone on this path of change.  
21. Improving infrastructure (road, railway, water supply, and port facilities) was a priority. 
Frequently mentioned deficiencies were a major cost  factor and bottleneck for increased activity.  The 
electricity subsector  was criticized for its frequent power cuts , supply constraints, and unreliability.  
The Government had been trying to improve th e situation by introducing a clear regulatory 
framework and partly privatizing the subsector .  The discussant asked whether improvements had 
already been achieved.  WT/TPR/M/147 
Page 8  
 
 22. Privatization could be part of a more efficien t structural change.  There were 1,500 state-
owned enterprises in Nigeria, accounting for about 50% of GDP.  Their performance and management 
were frequently criticized as extremely poor, and they  were major contributors to fiscal deficits and 
non-performing debts.  The results of privati zation had been very limited, and the discussant 
wondered how this record could be  improved, and what significance the Government attached to its 
privatization agenda.  
23. The agriculture sector took centre stage in structural change and poverty reduction.  It 
employed 70% of the workforce, and likewise around 70% of the population lived in poverty.  Much of the Government's effort to reduce poverty had focused on agriculture.  Th e result had been:  (i) a 
high and increasing degree of protection:  applie d tariff rates had increased from around 25% in 1998 
to above 40% in 2003, with peaks far above 100% for some products;  and import and export 
prohibitions for some essential food products had been enacted to support self-sufficiency, and restrict 
domestic competition;  and (ii) despite the Govern ment's efforts and success in reviving production, 
the agriculture sector was still underperforming:  pr oductivity was low and declining;  investment and 
machinery were very limited;  credit was difficult to obtain;  and despite deregulation, there was still 
the high price-low supply problem regarding state- produced fertilizers.  As a consequence, Nigeria 
had become a net food importer.  
24. Taking into account that around 80% of the poor fa milies' spending went on food, high prices, 
due to protection, combined with limited domestic fo od production was extremely risky with regard to 
poverty.  In this context, the further drastic re duction of food imports from about 15% to 5% set by 
the NEEDS could seriously aggravate the situation.  The discussant asked whether this situation could 
be turned around, i.e. by relaxing some of the impor t restrictions to reduce poverty and, at the same 
time, pushing forward structural reforms to increas e productivity in agriculture.  Since agriculture had 
so far received only 1% of the Government's capita l investment and 2% of the public spending, there 
was room for further action. 
(iii) Trade policy 
25. The Government had opted for a rather restri ctive import substitution approach.  High import 
tariffs were applied to agricultural and non-agricu ltural products;  the average applied MFN tariff was 
about 25% with a binding coverage  of only 9% of tariff lines.  Additional customs fees, bound at 
80%, discouraged imports.  Moreover, since 1998, the ten-fold increase in products covered by import 
bans indicated that the domestic economy remained  sheltered from competition.  The export industry 
was compensated for the high costs of imports through various schemes.  Numerous tariff exceptions 
were granted to attract FDI in the manufacturing sector. 
26. Overall, trade policy had created a complicated system of protection and promotion that 
encouraged rent seeking, fraud, and smuggling;  it had distorted prices, and led to higher costs for 
domestic business and consumers.   Through the NEEDS, which aimed at improving economic 
efficiency through structural change, making institu tions more reliable, and enhancing competition, a 
different kind of trade policy was expected, aimed more at promoting exports and openness. 
27. The Government's plans to adopt the ECOWAS  CET with far lower tariff rates (ranging from 
zero to 20%) were encouraging.  This, more liberal , trade regime would apply to most products by 
June 2005, and was due to be comp leted in 2007.  The discussant requested up-to-date information on 
this change in Nigeria's customs regime. 
28. Further liberalization between the ECOWAS countries could stimulate regional  integration, 
competition, and sensible division of labour. So far, onl y 6% of Nigeria's exports  and a mere 2% of its 
imports had arisen from trade with its African ne ighbours.  The discussant asked for Nigeria's views 
on the potential for increased regional trade and integration.  WT/TPR/M/147 
 Page 9 
 
 
 IV. STATEMENTS BY MEMBERS 
29. The representative of the European Communities  noted the developments in Nigeria since 
1998.  The EC welcomed the NEEDS, as well as th e reforms aimed at enhancing the non-oil subsector 
and implementing a social charter.  Nigeria's policie s were aimed at reducing corruption, bringing its 
legislation into conformity with the TRI PS Agreement, and reforming the financial, 
telecommunications, and transport subsectors.  Since many of these reforms related to issues 
discussed in the DDA negotiations, the EC expected that the importance given to addressing these at 
the national level would translate into participation at the multilateral level.  By signing the Fifth Protocol to the GATS, Nigeria had opened its servi ces market;  further WTO bindings would enhance 
its development.  
30. Nigeria participated in the African Union and in  the NEPAD, and played an important role in 
the multilateral negotiations and in the ECOWAS.  The EC was convinced that regional integration 
helped to consolidate regional trad e, and foster economic development.  To this end, trade needed to 
be liberalized in all sectors and for all products, otherwise unbalanced liberalization would hamper 
development, and limit the benefits.  Nigeria had also taken steps to address the relationship between 
trade and sustainable development; social and e nvironmental dimensions were the pillars of 
sustainable development.  The EC welcomed th e inclusion of a social charter in Nigeria's 
development policy.  Given the positive role of core labour standards fo r economic growth and 
development, the EC encouraged Nigeria to furt her explore the social dimension development. 
31. The representative expressed concerns about Nige ria's trade policy.  In recent years, third 
countries had faced increased tariffs, and extensive use of other charges, which had significantly 
increased the level of protection granted by tariffs.  Nigeria had also enlarged the list of products 
subject to arbitrary bans. These measures had been introduced at the expense of local and regional 
trade, and the aims of the NEEDS plan;  they had had an impact on exporters, as well as local consumers and producers.  
32. The EC encouraged Nigeria to continue its reform s, and to open its trade regime to external 
competition with a view to supporting growth an d reducing poverty, through competitive consumer 
prices and enhancement of the private sector.  Th e representative asked how Nigeria appraised the 
effects of its policies on its own development, as well as on the development of the countries in the 
region. 
33. The representative of Japan
 recalled Japan's initiatives to promote trade and investment in 
Africa, such as the Tokyo International Conference on the African Development Process, the Africa-
Asia Business Forum, and the TICAD Exchange Ne twork.  Japan and Nigeria had intensified their 
bilateral relationship.   
34. Japan appreciated Nigeria's role in promo ting the NEPAD, as well as the Government's 
reforms (e.g. the fight against corruption, poverty reduction, and restructuring the economy through 
liberalization, privatization, and the deregulati on of services).  Japan hoped that Nigeria would 
continue its reforms, and recover security in the Niger Delta area, which were critical to its economic 
development.  Nigeria depended highly on oil exports .  The current high oil prices were supporting its 
economic growth.  However, dependence on a si ngle export product made Nigeria's economy 
vulnerable to world market fluctuations.  Diversif ication was needed, and Japan welcomed Nigeria's 
endeavours to foster non-oil sectors.  Japan hoped that  Nigeria could improve its tariffs bindings since 
only 19.2% of its tariff lines were bound (in partic ular only 7% of its non-agricultural lines were 
bound), the average bound tariff rate was quite high, and the average applied MFN rate had increased 
4% from 1998 to 2003.   WT/TPR/M/147 
Page 10  
 
 35. Nigeria participated actively in the WTO, as well as in regional and bilateral trade 
agreements.  However, it had room for further WTO commitments (for example, it was not a signatory to the WTO plurilateral agreements nor had it yet tabled an initial offer in the services 
negotiations).  This year was the "Year of Afri ca".  In April, Japan announced that it would hold 
TICAD IV in 2008 and double its ODA to Africa in th e three years to come.  Japan considered that, 
due to Nigeria's major presence in Africa, its development would set a model for other African 
countries.  Japan sincerely hoped that Nigeria would be successful in the domestic reforms and further 
commitments in the multilateral trading system. 
36. The representative of Canada
 congratulated Nigeria for its reforms and efforts to create an 
attractive business environment by fighting co rruption and increasing transparency.  Canada 
applauded Nigeria's political leadership in the African Union, ECOWAS, and NEPAD.  Since 1998, 
Nigeria had reformed its economic policy.  Th e NEEDS was an important step towards full 
integration in the global economy.  Deregulati on and privatization would encourage Nigerian 
enterprises to be competitive.  
37. Although Nigeria had undertaken commitments under the GATS, deeper commitments were 
necessary to benefit fully from the Government's pr oposed deregulation.  Canada urged Nigeria to 
engage more in the GATS negotiations as the pre sented opportunities to diversify into new markets 
and to operate on a level playing field, with rules that improved transparency and predictability of the 
regulatory framework.  Canada commended Nigeria's efforts, since 1998, to introduce and implement 
reforms in its ports administration and customs regime.  It encouraged Nigeria to continue to play an 
active role in the ongoing negotiations on trade fac ilitation, and urged it to maintain its schedule to 
fully adopt the ECOWAS CET.  Although recognizi ng the need to take extraordinary measures in 
crisis situations, Canada was c oncerned about the growing list of products prohibited for import, but 
expected this to be only temporary.  Canada encour aged Nigeria to continue its regional integration.  
The representative reiterated that working with le ading developing countries, like Nigeria, could 
ensure that trade liberalization would benefit citizens of all countries. 
38. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen, and Matsu  
("Chinese Taipei") said that, although bilateral trade had been growing in recent years – Nigeria was 
Chinese Taipei's second largest African trading pa rtner – there was room for greater potential.  
Chinese Taipei noted Nigeria's progress to implement its WTO commitments.  The representative referred to Chinese Taipei's questions, which were  aimed at better understanding Nigeria's trade 
policies, and finding opportunities to further devel op their bilateral trade.  Chinese Taipei wished 
Nigeria success with its programme of structural reform. 
39. The representative of Switzerland
 welcomed Nigeria's progress towards macroeconomic 
stability and growth, based on sound stabilization polic ies supported by rising international oil prices. 
The favourable developments in the oil and gas subsectors and th e resulting increase in public 
revenues would help the NEEDS to be implemented rapidly.  This implied increased financing of 
infrastructure facilities, a precondition for the deve lopment and growth of non-oil sectors, and the 
implementation of structural reforms to improve the efficiency of Nigeria's economy and products, 
thereby allowing their diversification and the e nhancement of the overall growth prospects. 
40. Nigeria was Switzerland's third most important African trading partner.  Bilateral trade was 
mainly based on oil imports from Nigeria.  The repres entative recalled that Nigeria could not remain a 
one-product export economy.  Nigeria was not among the top destinations of Swiss FDI due to its 
difficult business and investment climate.  Switzerland strongly encouraged the Government to step 
up its efforts to implement reforms in the rule of law and governance, while maintaining a liberal 
trade and investment regime.  WT/TPR/M/147 
 Page 11 
 
 
 41. Nigeria participated actively in, and was contributing to finding a balanced outcome for the 
WTO negotiations.  Switzerland commended Nigeria' s regional integration through the ECOWAS.  
The adoption of the ECOWAS CET would simplify a nd rationalize its tariff structure, and eliminate 
import prohibitions, thereby improving market ac cess, and stimulating regional integration and 
economic development.  However, since 1998, Nigeria' s trade regime had become more protectionist;  
the average applied MFN tariff had increased as had the number of products subject to import bans.  
These restrictions, alongside increased tariff protection, had distorted prices, and led to inefficient resource allocation.  They undermined the Gove rnment's efforts to reduce poverty, increased 
smuggling, and created losses in customs revenue.  Switzerland welcomed Nigeria's efforts to bring its intellectual property legislation into conformity with the international rules and practices, and with 
the TRIPS Agreement.  It also welcomed the pr eparation of legislation on competition, and was 
satisfied that Nigeria had signed the Fifth Protocol to the GATS. 
42. The representative of Hong Kong, China
 said that bilateral trade relations with Nigeria were 
harmonious.  Hong Kong, China appr eciated Nigeria's commitment to the multilateral trading system 
and the DDA.  The DDA would provide potential devel opment gains, i.e. improved market access and 
multilateral trade rules;  special and differential trea tment, and technical assistance were part of this 
process.  
43. Nigeria was scheduled to fully adopt the EC OWAS CET, which would liberalize its trade 
regime.  He encouraged Nigeria to participate actively in the NAMA negotiations, and to accelerate 
its trade liberalization by bringing down its high tariff  rates;  increasing the predictability of its tariff 
regime;  expanding the coverage of  its tariff bindings in the non-agri culture sectors;  and simplifying 
its tariff structure.  He also urged Nigeria to e liminate the variety of internal taxes and duties on 
imports that added to the MFN tariff.  He wa s concerned about import prohibitions, quantitative 
restrictions, and licensing:  since 1998, there had been an increase in the products subject to import bans to protect domestic industries.  He asked wh ether Nigeria planned to phase out these prohibitions 
to align its trade regime with the ECOWAS.  
44. Hong Kong, China encouraged Nigeria to fulf il its notification obligations on anti-dumping 
and countervailing duties, as no notifications had b een received since 1998.  Nigeria had undertaken 
liberalization reforms in certain services subsector s, which would contribute to its further economic 
development.  To increase the predictability of its  trade regime, Nigeria should improve its services 
commitments, participate more actively in the ongoing services negotiations, and table its offer as 
soon as possible.  Hong Kong, China encouraged Nige ria to make commitment in road transportation 
services – largely provided by the private sector but op en to foreigners – to provide legal certainty to 
foreign services suppliers. 
45. The representative of Brazil
 referred to Nigeria's structural reforms since 1998, which, 
alongside progress in macroeconomic reforms, ha d improved Nigeria's economic performance.  In 
this regard, Brazil commended Nigeria for its averag e annual GDP growth of 4.8%, the decline in the 
public deficit, and the surpluses in  external trade.  Brazil welcomed the NEEDS, and hoped that 
Nigeria would succeed in implementing its reform policies.  Nigeria's economic prospects largely 
depended on the oil subsector.  However, agriculture  remained critical if Nigeria was to succeed in 
reducing poverty.  Brazil hoped that a successful conclusion to the DDA would help developing 
countries to diversify their economy.  Nigeria – a G-20 member – had been fighting trade distortions due to high levels of export subs idies and domestic support in devel oped countries.  Nigeria planned 
to implement the ECOWAS CET, which would simplif y and rationalize its tariff structure, eliminate 
import prohibitions, and improve market access.   Brazil hoped that the ongoing economic reforms 
would help Nigeria to create an environm ent conducive to investment inflows.  
46. The representative of the United States
 commended Nigeria's commitment to economic 
reform under the NEEDS.  She referred to the deep ened bilateral trade policy dialogue since 2004.  WT/TPR/M/147 
Page 12  
 
 She highlighted two important aspects of Nigeria's trade policy.  First, the Government was taking 
steps to improve transparency and reduce corrup tion;  the United States commended Nigeria's anti-
corruption measures, and invited the delegation to  provide more details on their accomplishments.  
Second, Nigeria was bringing its intellectual propert y legislation into conformity with the TRIPS 
Agreement, and the United States urged Nigeria to build on its efforts, since a strong intellectual 
property regime improved the investment climate. 
47. Nigeria was taking positive steps to liberalize trad e and reform its internal market.  However, 
some aspects of its trade regime might not be fu lly consistent with WTO provisions.  For example, 
import procedures had become more protectionist since 1998, as this had raised prices, distorted resource allocation, and detracted from growth a nd development.  The United States requested an 
update on Nigeria's plans in this area, including on  customs valuation, preshipment inspection, and 
harmonization with the ECOWAS CET.  In addition, there was a plethora of incentives, some of which could be negotiated on a case-by-case basis, a nd some of which had never been notified to the 
WTO.  In this regard, the United States reminded Nigeria that subsidies requiring the use of domestic 
goods in lieu of imports had been prohibited si nce 2003.  The United States looked forward to 
receiving Nigeria's initial services offer. 
48. The representative of the Republic of Korea
 welcomed Nigeria's efforts to implement 
macroeconomic and structural reforms.  Continue d reforms would help to translate Nigeria's huge 
economic potential into reality.  Despite progress,  Nigeria's trade regime had become more 
protectionist since 1998, and deprived Nigeria and its  trading partners of the benefits from further 
expansion of trade.  He encouraged Nigeria to make further efforts to create the environment for 
market-oriented and private-sector-led economic development.   
49. The representative of Turkey  said that Nigeria was among Turkey's important trading 
partners, and referred to work to further strengt hen their bilateral trade and economic relations.  
Turkey commended Nigeria's active participation in the WTO, and supported its recent reforms.  To 
consolidate its GDP growth rate and overcome its  economic impediments, Nigeria might further 
liberalize its trade policy regime by increasing its predictability and establishing the ECOWAS CET.  
Turkey hoped that the NEEDS would lead to a high level of economic growth, stability, 
competitiveness, and the diversificati on of exports and GDP composition.  
50. The representative of Benin  said that Nigeria and Benin had bilateral and sub-regional 
economic and trade relations.  A viable economic a nd trade environment in Nigeria and its role in 
ECOWAS was in Benin's interest. Benin congratulated  Nigeria for its efforts that had led to major 
economic and institutional achievements (e.g. high GDP  growth, and a decrease in the budget deficit).  
The representative underlined the importance of th e reforms under the NEEDS for improving the 
legislative and regulatory framework, as well as the investment environment.  Benin urged Nigeria's 
bilateral and multilateral partners to conti nue and strengthen their support for Nigeria. 
51. The representative of Rwanda  commended Nigeria for its macr oeconomic reforms, and the 
establishment of the NEEDS, the Budget Monitori ng and Price Intelligence Unit, the Independent 
Anti-Corruption Practices Commission, and the Economic and Financial Crime Commission.  
Rwanda welcomed reforms in de regulation, privatization, transparency, accountability, ports, and 
customs.  Nigeria was also making progress in agricu lture and services.  With continued efforts in 
these reforms and fuller participation in the multila teral trading system, boosted by technical and 
financial assistance, Nigeria should overcome its economic difficulties, achieve sustainable growth, 
and address debt and poverty.  The representative re ferred to the introduction of import prohibitions to 
safeguard public health and safety.  Nigeria need ed assistance to set up a transparent mechanism for 
testing and certification.  WT/TPR/M/147 
 Page 13 
 
 
 52. The representative of Pakistan  noted Nigeria's economic reforms since 1998.  The oil, 
tourism, and transport subsectors as well as the manufacturing sector had been deregulated and 
privatized.  However, Pakistan was concerned that , despite the trend towards trade liberalization, 
Nigeria's MFN rates on agricultural and non-agricultural products had increased since 1998.  Pakistan commended Nigeria's contribution in the DDA negotia tions, and looked forward to expanded bilateral 
trade.  
53. The representative of Morocco
 welcomed Nigeria's macroec onomic and structural reforms 
since 1998, which had led to high GDP growth, and the deregulation, privatizati on or consolidation of 
certain sectors.  Nigeria's trade policy was aimed at strengthening the competitiveness of its domestic 
industries, promoting export diversification, and set ting up an attractive environment for FDI.  The 
Government's commitment to pursue the ongoing reforms would help Nigeria to overcome the 
difficulties and constraints to bringing its legislation into conformity with the WTO.   Moreover, the 
new tariff structure would be establis h in June 2005 and all prohibitions would be eliminated by 2007.  
The representative referred to their bilateral tr ade and economic cooperation, and to Nigeria's 
participation in the ongoing WTO negotiations. 
54. The representative of India  noted Nigeria's annual average GDP growth since 1998, and 
commended it for firmly pursuing its structural refo rms.  However, growth was driven by the oil 
subsector, and susceptibility of fiscal and monetary po licies to developments in the international oil 
market, and the resulting macroeconomic fragility , had constrained Nigeria's efforts towards 
achieving broad-based growth.  Nigeria participat ed actively in the WTO, and as G-20 members, 
India and Nigeria cooperated closely;  they al so collaborated in the ongoing WTO negotiations.  
Nigeria was India's largest African trading partne r.  India had provided Nigeria with training and 
technical support.   
55. The representative of Kenya  complimented Nigeria for its macroeconomic and structural 
reforms since 1998.  However, its annual growth performance had been  constrained by its dependence 
on the oil subsector and the resulting vulnerabilit y to price fluctuations, compounded by supply 
bottlenecks in non-oil subsectors, debt burden, high poverty levels, and unstable macroeconomic 
environment.  This undermined Nigeria's efforts toward a long-term sustainable growth.  Kenya 
appreciated the Government's commitment to the NEEDS.  Successful implementation of reforms 
under the NEEDS required resources, and the inte rnational community should therefore support 
Nigeria.   
56. The export contribution to GDP showed the impor tant role international trade played in 
Nigeria's development prospects.  Kenya encourag ed Nigeria to diversify its economy and flows of 
exports, and reduce its dependence on oil.  Agri culture provided a high potential for growth and 
poverty reduction.  Kenya encouraged Nigeria to continue its efforts to revamp its agricultural 
production, and address market dist ortions through the WTO ongoing agri cultural negotiations.  Many 
laws and regulations had not been enacted or modifi ed to ensure their conformity with the WTO;  
Nigeria's commitments were largely unfulfilled.  Technical assistance and capacity building were 
needed to help it to implement its commitments, an d to integrate into the world economy.  Nigeria 
participated actively in the WTO,  as well as in the NEPAD.   
57. The representative of Malaysia  noted Nigeria's real GDP growth rates.  While recognizing 
Nigeria's oil dependence, Malaysia encouraged th e Government to continue  its economic reforms, 
including economic diversification.  Some r esults had already been achieved.  The recent 
improvements in oil prices should enable Nigeria to further increase its expenditure on infrastructure.  
A stronger economy would mean more scope fo r Nigeria to progressively liberalize its non-
agriculture and agriculture sectors.  Nigeria had reduced its high tariffs on raw materials and 
intermediate goods, which could expand the share of  the manufacturing sector in the GDP.  Reforms WT/TPR/M/147 
Page 14  
 
 in services would improve significantly the economic environment.  Nigeria participated actively in 
the WTO.  Malaysia was one of Nigeri a's trading and investment partners. 
58. The representative of Egypt
 noted Nigeria's efforts to improve and enhance the effectiveness 
of its economy and its attempts to comply with  its WTO obligations and commitments.  Egypt 
commended Nigeria for its participation in the DDA negotiations.  
59. The representative of Senegal  said that Senegal and Nigeria cooperated in the ECOWAS, 
NEPAD, and the African Union.  Since 1999, Nigeria had restructured its economy:  the macroeconomic and structural refo rms had reduced the budget deficit,  and achieved a high annual real 
GDP growth rate.  The representative referred to th e goals of the NEEDS;  the important progress in 
services, due to privatization;  the institutions set up to fight corruption and to increase transparency in 
order to create an attractive environment for nationa l and foreign private investment;  and reforms in 
customs and the port system.  Nigeria was committed to the WTO principles and objectives, and was a major player at the regional and sub-regional le vels.  Kenya urged Members to continue to support 
Nigeria's efforts.    WT/TPR/M/147 
 Page 15 
 
 
 V. REPLIES BY THE REPRESENTATIVE OF NIGERIA AND ADDITIONAL 
COMMENTS 
 
60. The representative of Nigeria  said that Nigeria had taken note of the concerns and points 
raised during its third Review.  This Review had a llowed Nigeria's partners to  appreciate and evaluate 
its trade policies and practices, especially its major developments since 1998, as well as the structural 
reforms embarked upon since 1999.  This Review had al so allowed Nigeria to take stock of its trade 
policies and practices, including the need to realig n or bring them into conformity with its WTO 
obligations and commitments.  Nigeria welcomed a nd appreciated the concerns raised and the support 
given by the Members.   
61. The representative assured Nigeria's trading pa rtners that the issues raised, especially the 
temporary import restrictions, would be addressed soon as a demonstration of Nigeria's commitment 
to the principles of the multilateral trading system.  He also assured them that the Government was 
committed to the ongoing structural reforms in the trad e, economic, social, and political fields in order 
to increase confidence, create a better business envi ronment, and improve the living standards of 
Nigerians.  Nigeria solicited the Members' support an d cooperation to make these reforms successful.   
62. While preparing its written answers to the questi ons, Nigeria had realized that the task ahead 
was enormous, and, therefore, would appreciate significant assistance in  trade-related capacity 
building, particularly with respect to the implem entation of the Trade Policy Action Plan.  Nigeria 
was convinced that progressive liberalization of its trade regime would bring significant dividends to 
Nigeria and its trading partners.  The repr esentative acknowledged the extensive support and 
assistance received from the United Kingdom's DFI, the WTO, UNTAD, WIPO, and UCID, among 
others, and said that some of the ongoing refo rms would not have been possible without their 
contributions.   
63. The discussant  said that the 6.1% growth in 2004 – a very good basis for structural reforms 
and further development – had been  higher than expected.  Growth in the non-oil subsector had been 
even higher than in the oil subsector.  He re ferred to a proposed budget increase, which would 
jeopardize price stability.  He reiterated that the NEEDS was an excellent gui deline for the future, and 
encouraged Nigeria to implement it quickly, befo re the 2007 elections, since it was difficult to 
implement far reaching structural reforms before  elections.  The discussant asked about Nigeria's 
plans for 2005, and how far Nigeria intended to pursue its structural reforms. 
64. The representative of Switzerland  thanked Nigeria for its atte mpts to respond to the Swiss 
questions.  However, Switzerland reserved the right to  come back to Nigeria in order to gain a better 
understanding of the answers. 
65. The representative of the United States  recognized Nigeria's economic and political efforts, 
and encouraged it to build on its achievements.  He thanked Nigeria for its answers, and also reserved 
the right to follow them up.  With regard to other duties and charges, and privatization, the 
United States sought information on Nigeria's plans to streamline or rationalize these charges either 
on its own or in cooperation with ECOW AS, and on further privatization. 
66. The representative of the European Communities  thanked Nigeria for its answers, and also 
reserved the right to come back to them.  The representative referred to the temporary import bans, 
and hoped that they would effectively be addressed soon.  The EC encouraged Nigeria to go further 
with its reforms.  
67. The representative of Nigeria  said that Nigeria was a young democracy.  Currently, the 
Government, within its macroeconomic policy, exer cised budgetary constraint while the Parliament WT/TPR/M/147 
Page 16  
 
 wanted extensive expenditures to accommodate proj ects.  Referring to the 40% budget increase, the 
representative said that the Government would ensu re that the final budget could be implemented 
without leading to distortions.  The Government was strongly committed to continuing its structural 
reforms in, and far beyond, 2005.  It would address specifically the issue of tariff rates (i.e. reducing 
the gap between bound and unbound tariffs), and charg es;  most of these were being abolished to 
reduce the cost of doing business in Nigeria.  Th e privatization programme was under way, but the 
response from foreign investors had not been encour aging.  Companies to be privatized had been 
advertised, and Nigeria urged Members to indicate interest.  WT/TPR/M/147 
 Page 17 
 
 
 VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
68. We have conducted this third Trade Policy Re view of Nigeria in a frank and constructive 
manner.  We have benefited from the contribution of  the Nigerian delegation, led by Mrs. Ogunleye, 
Permanent Secretary of Federal Ministry of Commerce, the very insightful comments by our discussant, Dr. Alexander Gross, and the detaile d questions and thoughts of several Members. 
69. Members appreciated Nigeria's active participation in the multilateral trading system, 
including the ongoing negotiations.  They stressed its im portant role in regional integration in Africa, 
mainly through its membership of the Economic Community of West African States (ECOWAS).  
Members also commended Nigeria on its efforts towards full democracy and on steps taken to reduce corruption, but stressed the n eed for further improvement of its business environment. 
70. Nigeria's macroeconomic and structural refo rm efforts, including through the National 
Economic Empowerment and Development Stra tegy (NEEDS), were acknowledged, and the 
contribution of developments in the internationa l oil market to its recent economic performance was 
emphasized.  Nonetheless, trade barriers and increased foreign assets from oil exports have 
maintained inflation at a high level, while trade pr otection and the exchange ra te regime have fuelled 
informal trade. 
71. Members expressed concerns about the increase in the level of protection of Nigeria's 
economy since its last TPR in 1998:  MFN tariffs ha ve been raised on many  products, the number of 
import bans has been increased tenfold, and, in a ddition, various other duties and charges apply to 
imports.  These measures, together with various duty and tax concession schem es – sometimes subject 
to local-content requirements – make Nigeria's trad e regime complex, while the binding of import 
duties at ceiling rates further challenges its pr edictability.  State ownership remains high and 
preshipment inspection is required on imports.  Memb ers urged Nigeria to liberalize its trade regime 
and to implement the WTO Customs Valuation Agreem ent.  The implementation of the liberalization 
programme adopted by ECOWAS should help. 
72. Members welcomed Nigeria's re form efforts in the services and energy sectors, and sought 
clarification on the pursuit of the reforms.  Member s also asked questions on  other issues, notably:  
trade policy formulation and implementation;  quantitative restrictions and the licensing system;  contingency trade remedies;  standards and othe r technical requirements;  public procurement;  
intellectual property rights;  and speci fic measures related to agriculture. 
73. Members appreciated the responses provided by the Nigerian delegation, and looked forward 
to further written replies. 
74. In conclusion, it is my understanding that Memb ers have encouraged Nigeria to pursue its 
macroeconomic reforms, with an emphasis on tr ade liberalization through simplification and 
reduction of import duties, elimination of import ba ns, and adoption of trade facilitation measures and 
WTO-consistent rules and regulations.  Such reform s, together with the dismantling of supply-side 
constraints and improvements in Nigeria's multila teral commitments in goods and services, should 
promote both a better allocation of resources in line with Nigeria's enormous comparative advantages, 
and the diversification of the economy away fro m petroleum products.  These should contribute to 
mainstreaming trade into Nigeria's development strategy and to the effectiveness of its poverty 
reduction strategy.  Nigeria's trading partners could help by providing market access opportunities. 
__________