WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/147/Add.1 
14 June 2005 
 (05-2492 ) 
Trade Policy Review Body 
11 and 13 May 2005  Original:  English/ 
                anglais/                 inglés 
  
TRADE POLICY REVIEW 
NIGERIA 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Don Stephenson (Canada) 
 
 This document contains the advance writte n questions, and replies provided by Nigeria.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 
11 et 13 mai 2005  
EXAMEN DES POLITIQUES COMMERCIALES 
NIGÉRIA 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Don Stephenson (Canada) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par le Nigéria.1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
11 y 13 de mayo de 2005  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
NIGERIA 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Don Stephenson (Canadá) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por Nigeria.1 
 
                                                      
1 In English only./En anglais seulement./En inglés solamente. WT/TPR/M/147/Add.1 
Page 3  
 
 
 WRITTEN RESPONSES TO QUESTIONS RAISED 
 
I. ECONOMIC ENVIRONMENT 
(1) M ACROECONOMIC AND STRUCTURAL REFORM  
(i) Trade policy formulation and implementation 
Regarding the involvement of all stakehol ders in the trade policy formulation and 
implementation process, the new Trade Policy a dopted in 2002 provides for an inter-agency 
framework, referred to as the National Focal Po int on Multilateral Trade Matters (NFP).  The 
membership of the NFP comprises all trade-relate d Ministries and sectoral agencies, the academia, 
business and professional associations and civil so ciety groups, including the Nigeria Labour 
Congress (NLC) and National Association of Nige rian Traders (NANTS).  All sections of the 
Nigerian society are therefore involved in the de velopment of national positi ons for negotiations, as 
well as in the implementation of the outcomes of tr ade negotiations, whether at bilateral, regional or 
multilateral levels. 
The new Trade Policy further provides for ins titutionalised dialogue between the Honourable 
Minister of Commerce and Chief Executives of major public and private sector companies in all 
sectors of the economy.  Trade capacity building, seminars, workshops and training programmes are 
also organised on trade issues for stakeholders in the appropriate sectors.  Nigeria requires support and assistance in order to intensify these activities.  
Furthermore, with the assistance of the Departme nt for International Development (DFID) of 
the UK, Nigeria has initiated the process for mainst reaming trade in nationa l development plans, 
which commenced with a High-Level Policy Briefing Session for Honourable Ministers, Permanent 
Secretaries and Chief Executives of trade-related agencies, particularly those responsible for 
communications, energy, transport, customs and ports, etc.  The Trade Policy Action Plan which emerged from the briefing session, has been submitte d to the Cabinet for approval.  A Trade Policy 
Advisory Council to be chaired by the Vice-President of the Federal Republic of Nigeria is also being 
established to monitor the implementation of the Trade Policy Action Plan.  The annual Nigerian 
Economic Summit Group (NESG) also provides a foru m for both Government and the private sector 
to agree on common policy measures, which prom ote increased certainty and predictability. 
The main focus of the Trade Policy Action Plan is to drastically reduce the uncertainty and 
unpredictability of the trade policy regime.  Other issues to be addressed include the harmonisation of 
trade practices with those of other ECOWAS countri es in order to promote the free Trade Area in the 
region; ensure respect for Nigeria's obligations under the multilateral and regional trading system, 
create a conducive and competitive environment in  which Nigerian businesses can flourish and 
compete in the global and regional economy, as well as other issues, including trade information, 
research and statistics to ensure evidence-based polic ies.  Already, Nigeria is working closely with 
Benin Republic to address specific concerns rela ting to illegal transhipment, smuggling and cross-
border crimes. 
It is too early to give a firm assessment of th e effectiveness of the new Trade Policy.  Nigeria, 
however, recognises the need for a systems tic trade needs assessment in order to identify priorities, 
especially as already highlighted in the Trade Polic y Action Plan.  Assistance and support by partners 
in this area would be highly appreciated. 
Regarding the anti-corruption efforts by Gove rnment, the  EFCC between May 2003 and June 
2004, recovered money and assets derived from crimes worth over US$700 million.  It also recovered WT/TPR/M/147/Add.1 
Page 4  
 
 another L3 million from the British Government.  It h as arrested most of the notorious advanced fee 
fraud kingpins and over 500 suspects are in cust ody.  Presently, 100 cases are being prosecuted in 
court while over 300 are at various stages of investigation.  The EFCC is also handling one of the biggest world fraud cases involving about US$242 million arising from a bank fraud in Brazil.  It has further recovered significant sums of money with re spect to failed government contracts.  The present 
administration has therefore demonstrated strong pol itical will to fight corruption and other economic 
and financial crimes in Nigeria.  
Nigeria in 1994 introduced a Petroleum Sp ecial Trust Fund which was charged with 
responsibility for intervention towards the rehab ilitation and development of both economic and 
social infrastructures.  Although, the Fund and its  activities were subsequently abolished in 1999, 
Nigeria would be interested in sharing experien ce on the Norwegian experience as it is capable of 
enabling the country build up a reserve for future expenditure in order to guarantee intergenerational 
fairness. 
(ii) Investment regime 
Nigeria does not presently have a border one-stop shop where exporters/ importers can make 
all their formalities through a single channel.  While all export formalities are ha ndled by the Nigerian 
Export promotion Council (NEPC), Nigerian Cust oms Service (NCS) is responsible for import 
formalities. 
The NCS may accept collateral for the release of goods, especially under the Manufacture-in-
Bond Scheme (MIBS).  However, such collaterals do  not apply to goods that may not be cleared due 
to infringement of existing import regulations, more so as such goods are normally seized and 
destroyed.  There are also provisions for guarantee of  goods in transit, particularly with respect to 
land-locked neighbouring countries. 
The repatriation of profits, dividends and capita l is guaranteed under the main law governing 
investment, and it is not subject to a case-by-case negotiation.  Other incentiv es relating to company 
income tax, pioneer status, research and developmen t (R&D), capital allowances, in-plant training, 
investment in infrastructure or economically disadva ntaged areas, local value added, labour intensive 
mode of production, re-investment allowance and minimum local raw material, may cover all sectors 
or apply to only specific sectors.  The nature and application of these incentives have been 
considerably simplified with clear guidelines as to the activities that may enjoy the benefits thus 
limiting the discretion of the authorities to only tho se incentives applicable in the sector involved.   
It is to be stressed that the application of  these tax incentives by the Nigerian Investment 
Promotion Commission (NIPC) is not continge nt upon the use of domestic over imported goods, 
except where the use of local raw materials is involved. 
Efforts by Government to improve the business environment include the preparation of 
competitiveness studies, in order to determine the cost of doing business in Nigeria, as well as an 
investors' roadmap.  The new Tariff Structure a nd current measures in customs and port reforms, 
review of incentives, etc., have been geared to wards addressing the key issues identified in these 
studies.  Measures aimed at improving service deli very and the way government institutions work 
should also assist in improving the overall business environment. 
Selected pre-qualified firms may remain on the “long-list” maintained by the tendering 
Ministry or Agency for as long as it is necessary fo r the execution of the related projects.  A pre-
qualified firm may, however, decide to opt out of the list. WT/TPR/M/147/Add.1 
Page 5  
 
 
 The draft Bill for a legal framework on procurement and for the establishment of the 
Procurement Commission is still undergoing enactment by the National Assembly.  Government has, 
however, proceeded to establish a Procurement Cadr e in the Public Service.  All ministries and 
agencies have also been directed to create Procurement Units.  It is expected that when the draft Bill is 
signed into law, the ongoing administrative arra ngements would dove-tail and ensure successful 
implementation. 
The customs valuations regulation were enacted into law in 2003.  The NCS would, however, 
require re-orientation and re-training to fully impl ement the new valuation system.  In view of the 
challenges relating to legislation by the National Assembly, it may not be possible to provide an 
indicative timetable for the passage of the other B ills.  However, assistance to enable the National 
Assembly expeditiously handle the technical aspects of these regulations would greatly facilitate in 
the early preparation of these trade-related regulations.  Nigeria wishes to assure Members that every effort would be made to align liberalisation w ith the relevant WTO provisions, including provisions 
for appeal or judicial review.  The legislation w ould be notified to WTO as soon as they come into 
law. 
An empirical analysis of the results of the cu rrent reforms to privatise, regulate and empower 
the private sector, etc., is yet to be carried out.  In view of the complex, cross-cutting and heterogeneous nature of the issues involved, Nigeria would appreciate assistance from members in developing empirical evidence to monitor a nd guide the future course of the reforms. 
(iii) Competition policy and price control 
On the proposed Federal Competition Commission, Nigeria wishes to further explain that all 
the existing draft Bills have been harmonised unde r a new body to be known as the Nigerian Trade 
and Competition Commission (NTCC), which will be  responsible for the handling of all issues 
relating to anti-dumping, subsidies, safeguards, c onsumer protection, anti-trust and competition, and 
weights and measures administration.  The new draft Bills were prepared with assistance from relevant international organisati ons, particularly the WTO Secretariat and UNCTAD; and have fully 
taken into account Nigeria's rights and objections in the WTO, including provision for judicial review. 
The declaration of prices of all specific goods or services to be controlled by the President has 
been eliminated from the new Anti-Trust and Comp etition Bill within the framework of the NTCC.  
The proposed NTCC is an independent body, as th e main objective is to provide a rule-based 
mechanism for the adoption of trade policy measures in the areas under the Commission's 
competence.  The scope of responsibility of the NTCC relates to a unified approach to consumer 
protection in such a way that all aspects of anti- consumer corporate behavi ours and practices would 
be handled by the Commission.  This means th at the Commission's competence would cover all 
competition and consumer affairs, including the determination and appli cation of trade defense 
measures.  The draft Bills for some of these laws pr ovide for review panels in order to ensure the 
early resolution of disputes as well as avoid the cumbersome procedure of the regular courts.  
However, while a party that is not satisfied with the outcome of a decision by th e panel is free to refer 
the matter to the regular courts. 
(iv) Public enterprises and privatisation 
Nigeria is determined to shore up its investme nt profile and tread the path of enhanced 
political, social and economic development on a sustaine d basis.  In tune with  global economic trends, 
Government is divesting its interest in over 1000 St ate-Owned Enterprises (SOEs) to foreign and local 
core investors.  These SOEs cut across diverse areas of economic activities, ranging from agriculture 
to aviation and from oil and gas industries to hos pitality industry.  Detailed information on the 
companies earmarked for privatisation including th e status of each company, location, type of WT/TPR/M/147/Add.1 
Page 6  
 
 business/capacity, facilities, utilities, employees, fina ncial status, privatisation plan and contact 
persons, can be obtained from the Bureau  of Public Enterprises (www.bpeng.org). 
The privatisation programme involves marketing the right public enterprises to the right 
strategic investors with the appropriate financial a nd managerial competence at the right prices, based 
on best global practices.  A wide range of sales met hods is in use, e.g., core-investors, public offer, 
concessions, etc.  Efforts are also being made to ensure transparency in the application of the 
established procedures for privatising each enterprise.  There are no limitations on the participation of 
foreign investors in the privatisation programme. 
(v) Trade policy in NEEDS and sustainable development 
The links between trade policy and Nationa l Economic Empowerment and Development 
Strategy (NEEDS) can be found around its three pillars of empowering people, promoting private 
enterprise and changing the way the Government do es its work.  Nigeria has recognised that the 
exchange of goods and services empowers people to consume and produce in ways otherwise not 
possible.  By expanding production, trade also cr eates employment opportunities, increase income and 
reduces poverty.  The NEEDS' strategy to promote private enterprise also contains numerous trade-
related activities, including globalisation, regional integration initiatives, infrastructure provision and 
access to finance.  Changing the way Governme nt does its work under the NEEDS should also 
enhance efficiency and effect of customs and ports procedures on trade flows, while simplified government regulations would assist in developing  product standards and control of anticompetitive 
behaviours by operators.   
Sustainable development, in particular its so cial and environmental pillars, remains a core 
element of Nigeria's Trade Policy.  This is to ensu re that the exploitation of natural resources for trade 
is carried out in a sustainable manner that would not adversely lead to imbalances in the environment, 
and/or further increase the risk for th e vulnerable groups in the society. 
(2) N
IGERIA IN THE WTO 
(i) Trade agreements and arrangements 
Nigeria did not participate in the negotiations  on any of the Plurilateral Agreements that 
emerged from the Tokyo Round.  At that time, it was felt that some of the issues being addressed by the Plurilateral Agreements did not have any direct  bearing on the country's economic policies, e.g., 
the Agreement on Trade in Civil Aircraft. In the future, Nigeria may consider undertaking 
commitments in some Plurilateral Agreements, par ticularly those that are still in place, and are 
capable of assisting the country maximise the benefits from its current reforms.   
Presently, efforts are on-going at the WTO to fulf il the notification requirements with respect 
to ECOWAS and the African Economic Community (AEC) by the members of the affected organisations. Technical assistance and guidance of WTO Secretariat is required to facilitate a speedy 
completion of the notification requirements to enhance transparency. 
(ii) Preferential arrangements 
The tariff harmonisation schedule under the ECOWAS Tariff CET is on course and would 
come into effect in 2008.  President Olu segun Obasanjo, in his 2005 Budget Speech has duly 
reaffirmed Nigeria's commitment to the full impl ementation of the ECOWAS (CET).  Nigeria, along 
with other member countries has submitted to the EC OWAS Secretariat, its existing tariff structure as 
well as list of exception and exemptions, to ensure  an early completion of the tariff harmonisation 
implementation schedule. WT/TPR/M/147/Add.1 
Page 7  
 
 
 Currently, Nigeria has commenced its national st udies aimed at developing the evidence to be 
used in the planned dialogue with stakeholders, regarding the whole integration process in the sub-
region as well as the ECOWAS-EU, EPA negotiations.  Nigeria has no special difficulties with the regional integration process once agreement is reached with the ECOWAS Secretariat on the list of exemptions and exceptions to the Common External Tariff. 
The harmonisation of Nigeria's tariff is expected  to transform some banned items into the new 
tariff regime to be implemented with effect from June, 2005  while the remaining items will be phased 
into the ECOWAS CET band, starting January 2007.  This would ensure that every importer would be 
facing the same low tariff regime.  Already, Government has commenced publicity and training 
campaigns to ensure that officials in the Ministry  of Finance and Customs become familiar with the 
new regime and can appropriately guide the public. 
Nigeria believes that the establishment of an FTA in the sub-region, including monetary 
integration would assist in promoting its trade with other member countries, particularly in view of 
the existing payments problems.  Increased partic ipation in regional trade should also enhance the 
contribution of the secretor to the growth and development of the economy as well as provide the 
platform for enhancing competitiveness.  Giving th e high potentials anytime that that successful 
integration is achieved in the sub -region would be in Nigeria's inter est, meaning that the earlier the 
better. 
Regional Trade Policy initiative should also assist  Nigeria's participation in bilateral and 
multilateral trade arrangements.   
II. TRADE POLICIES 
(1) T
ARIFFS  
(i) Bound and unbound tariffs 
It is to be observed that prior to the Uruguay Round, Nigeria had only one item on its 
schedule.  However, a modest attempt was made to deepen the level of tariff binding during the 
Uruguay Round negotiations.  In the face of the ongo ing reforms, Nigeria hopes to further increase 
the level of its binding.  Regarding the question of  the gap between bound and applied rates, Nigeria 
in the context of the current Doha Round, also hopes to realign its bound tariffs  to achieve consistency 
with the current applied rates and ensu re the certainty of the tariff regime. 
(ii) Other duties and charges 
The application of most other duties and charg es in Nigeria is not based on the value of the 
items, but on the value of the customs duties charge d, thereby not significantly increasing the level of 
border protection. 
The fees charged by  NAFDAC, on the other hand,  relate to its services regarding testing, 
certification and registration of re gulated products.  The fees charge d by NAFDAC and other standard 
setting bodies are on a once-and-for-all basis, except wh en renewals are required.  Domestic products 
within the category of regulated products are also  required to comply with the same testing, 
certification and registration procedures. 
The port development levy is chargeable only on goods being imported by sea. It does not, 
therefore, apply to imports through other entr y points.  The Comprehensive Import Supervision 
Scheme, prior to the reintroduction of Pre-ship ment Inspection in 1999, was normally funded by 
Government.  Importers are now required to pay the charge.  G overnment intends to reintroduce WT/TPR/M/147/Add.1 
Page 8  
 
 destination inspection in the context of the on-going customs reforms, which should ultimately lead to 
the elimination of the Comprehensiv e Import Supervision Scheme charge. 
Preference for non-price based measures in Nige ria has been dictated largely by difficulties 
that reduce the efficacy of price-based measures.  As already explained, the long years of military 
dictatorship have led to a complete erosion of th e rule of law and decay in national institutions.   
Government is convinced that drastic measures wh ich may be more conveni ently implemented, are 
required to address the prevailing challenges.  The u se of very high tariffs a nd import prohibitions is 
therefore expected to provide temporary relief, and enable Government to develop a rule-based 
mechanism as a permanent solution. 
(2) C
USTOMS PROCEDURE AND VALUATION , AND PRESHIPMENT INSPECTION  
(i) Company registration procedures 
The requirements for registration with Corporate Affairs Commission (CAC) are, search of 
availability of name, payment of appropriate Stamp Duty fees at the Federal Inland revenue Service, 
submission of Memorandum and Articl es of Association together with statutory forms of verification 
and assessment, and the payment of statutory fees.  The fees charged depend on the share capital of 
the company. 
Registration can only be denied when the required documentation as listed above is not 
provided, or where the name for registration is in conflict with an existing registered name, or where 
the Memorandum and Articles of Association of th e proposed company are in conflict with the 
objectives and principles of State policy. 
(ii) Destination inspection 
Destination inspection would be reintroduced  as soon as the on-going customs reforms are 
concluded.  Already, the installation of scanne rs and ASYCUDA are being handled through BOT. 
(iii) Customs reforms 
The NCS is in the final stages of concluding arrangements lto launch software called Clean 
Report of Inspection (CRI) and Authority Card Ad ministration System (CRACAS).  These measures 
should facilitate clearance of goods at the nation's ports and move the Service in the direction of 
achieving paperless operations.  The essence is to enhance trade, en sure speedy clearance of goods as 
well as eliminate fraud, touting and other perceived de lays associated with the transfer of CRIs.  The 
system would also eliminate the unauthorised use of the Single Goods Declaration (SGD) Form.   
(iv) Internal taxation 
Nigeria confirms that both the imported a nd domestically produced goods listed in 
Table III.33 are currently exempted from VAT. 
(v) Contingency trade measures 
Since Nigeria is yet to enact WTO-consistent  anti-dumping and subsidies laws, the country 
has not imposed any anti-dumping or countervailing du ties since 1998.  Notifications to that effect 
would be submitted to WTO. WT/TPR/M/147/Add.1 
Page 9  
 
 
 The notification by Nigeria with respect to safe guard actions relates to pre-existing measures; 
and was submitted in the context of  BOP consultations.  However, th e proposed legislative framework 
for the NTCC also includes provisions for a WTO-consistent safeguard legislation. 
(vi) Import prohibitions 
The import bans imposed by Nigeria on some products are meant to check the activities of 
some unscrupulous operators, and to allow Government to put in place WTO-consistent rules.  The 
measures are essentially transitory and are not intended for indefinite application.  Nigeria is assessing 
the impact of the import bans on its economy and the trade of other countries.  Nigeria wishes to assure all those affected by the measures that they ar e being reviewed with a view to phasing them out 
in 2007, as the process for their eventual  elimination has already commenced.   
Nigeria confirms that each application for the importation of restricted products, particularly 
petroleum products is determined on its merit, but there are no quantitative restrictions and such 
waivers are not dependent on the country of origin .  Such waivers can be obtained based on request 
submitted to the Honourable Minister of Finance.  A transition period is usually provided for to ensure 
that shipments made before the effective date  of the measure are not unduly affected by the 
prohibitions.  The importer and the NCS can always reconcile based on the actual dates on the 
shipping documents. 
Since the reasons for the import prohibitions are go beyond the promotion of industrial 
development, Nigeria has not developed the data to establish a causal link between the development 
of domestic industry and the prohibition of imports. 
The major criteria used in evaluating waiver a pplications is the impact on the operations of 
the applicant.  The new Tariff Policy is expected to eliminate some of the distortions and incentives 
for businesses that have been associated w ith the use of discretionary waivers. 
(vii) Incentive scheme, including export finance, duty drawback, and EPZ 
Nigeria's industrial development has been larg ely dependent on imported inputs.  A "bona 
fide" manufacturer therefore is a producer who must import inputs for use in his production process.  
The incentive is not available to an importer who is not a proven manufacturer that uses the imported 
inputs.  Bona fide manufacturers may also benef it from the other incentives be ing administered by the 
NIPC as provided in the enabling legislation.   
Under Article 27.2 (a) of the Agreement on Subsidies and Countervailing Measures, 
provisions regarding prohibited subsid ies, {Article 3.1(a)} do not apply to Nigeria.  All incentives can 
be enjoyed by all companies operating in the c ountry on a non-discriminatory basis.  Nigeria, 
therefore, believes that these incentives cannot  be described as export subsidies.   
The EEGF was suspended by Government in 2003.  New guidelines on the scheme would be 
notified to the WTO once they are approved by the Cabinet.   
The list of industries and products that qualify for pioneer status has been determined under 
the enabling legislation and covers 65 different in dustries. The full list is available on the NIPC 
website, www.nipc-nigeria.org.   
Pioneer status is only available in the form of five years tax holiday to qualifying industries 
located anywhere in the Federation, and seven-year holiday in respect of qualifying industries located 
in any economically disadvantaged local government area of the Federation.   WT/TPR/M/147/Add.1 
Page 10  
 
 (viii) Export levies and bans 
Nigeria is a net-food importing country.  Th e export prohibition on rice, maize and beans is 
for purposes of domestic food security and lo cal processing, as well as to prevent the illegal 
transhipment of imported food items to neighbouring countries. 
(ix) Standards and other technical regulations 
Consumer products such as electrical and elect ronic products are regulated by the Standards 
Organisation of Nigeria (SON), to comply with ma ndatory standards, which are based on related 
international standards.  Conformity assessment pr ocedures are consistent with the requirements of 
the ISO and the International Electrotechnical Commission (IEC).  Mutual Recognition Arrangements 
may be made with SON to promote  equivalence,  even where the imported goods cannot carry the 
Nigerian Industrial Standards certification mark. 
The use of permits in the importation of any anim al products (e.g. semen or egg) is to allow 
for the control of diseases as well as protect animal  life, health and safety.  The current bans on the 
import of animal products is for health reasons  as importers were no longer complying with 
quarantine and other safety requirements. 
Written answers to the specific questions on SONCAP by the US delegation would be 
provided within one month after this meeting. 
(x) Intellectual property rights 
The current law does not provide for the protec tion of geographical indications. However, the 
draft Bills under preparation will provide for the protection of geographical indications, including 
additional protection for wines and spirits as require d by the TRIPS Agreement.  The draft Bills also 
have provisions on service marks, border measures, pate nts, and layout designs of integrated circuits 
and protection of undisclosed information. 
Efforts made by Government in preventing piracy by disk manufacturing plants include 
constant raids conducted by the Nigerian Police,  in cooperation with the Nigerian Copyright 
Commission (NCC), and seizure of goods by the Department of Customs and Excise upon a notice 
given by the owner of the copyright. 
It is important to note that in Nigeria, an y accused person is presumed innocent until proven 
guilty.  The law empowers the court upon conviction fo r criminal counterfeit or infringement to order 
seizure and destruction of infringing copies a nd materials or counterfeit goods, including the 
equipments used in producing such goods.  Assist ance to enhance enforcement of IPRs would be 
appreciated in the area of capacity building for judges, Nigerian Police and the Nigeria Customs 
Service. 
The low numbers of successful prosecution of in fringement cases may largely be traced to the 
provision of the law which requires the rights owner to make a complaint as well as the limited 
number of Judges at the Federal High Court which is the only court with jurisdiction on IPR cases 
The requested statistics would be provided at later date. WT/TPR/M/147/Add.1 
Page 11  
 
 
 III. SECTORAL POLICIES 
(1) A GRICULTURE  
(i) Policy development 
Over 70% of the Nigerian population live in ru ral areas and are dependent on agriculture for 
their livelihood.  Nigeria, therefore, provides subsid ies on fertilisers, tractors and pesticides in order to 
promote rural development as well as ensure livel ihood for households and food security.  With 
respect to negotiation positions on agriculture in the Doha Round, Nigeria places special importance 
on the removal of export subsidies and the elimina tion of restrictive domestic support measures.  
Nigeria expects a pro-development outcome in the agriculture negotiations an d would seek substantial 
market access for products of export interest to de veloping countries, particularly cotton.  To further 
provide the country's developing needs, Nigeria would welcome a positive outcome with respect to 
Special Products (SP) and Special Safeguard Mechanism (SSM). 
Food items are procured under the National Strategic Food Reserve Programme by the 
Federal Ministry of Agriculture, through competitive bidding and are subsequently stored in its silos 
for release to the market in emergency situations .  Allocations are generally made to the public 
through the State and Local Governments in an affect area. 
(2) M INING , QUARRYING , AND ELECTRICITY  
(i) Petroleum and natural gas 
Foreign companies wishing to join the new licen sing round for marginal fields are required to 
participate in the bidding process being handled by the Ministry of Petroleum Resources, in collaboration with the Nigerian National Petroleu m Corporation (NNPC).  Further information on 
procedures and regulations can be obtained from the NNPC website: www.nnpc-nigeria.com. 
In view of the dominant role of the oil sector in the Nigeria economy, Government does not 
currently have plans to reduce the ta riff rates applicable to imports of crude petroleum and natural gas. 
The transparency guidelines provided under th e Extractive Industries Transparency Initiative 
(EITI) process apply to both Nigerian and foreign comp anies that invest in the oil sub-sector.  Details 
of the guidelines provided under the EITI in Nigeria would be made available at a later date.   
Nigeria is already importing oil products to  replenish shortages and revamp price 
liberalisation.  However, the overall priority of  Government is in the rehabilitation of existing 
refineries along with the establishment of new ones by the private sector to supply the domestic market as well as export. 
Refined petroleum products are exclusively exported by the NNPC largely because of its 
ownership of all refineries in the country.  Howeve r, with deregulation and privatisation of the sub-
sector, any investor or private refinery would be allowed to export its products as well as supply the 
domestic market.  Nigeria is satisfied that the current measures would promote free trade and ensure fair competition.  Moreover, certain industrial establishments under the present regime are permitted 
to export part of their production of oil produc ts and petrochemicals, including condensates and 
benzene. 
The Independent Gas Regulatory Commission is responsible for the full range of economic 
and technical regulations of the domestic gas sect or.  The new National Gas Transportation Company 
would be responsible for the development of ga s distribution infrastructure and networks.  The WT/TPR/M/147/Add.1 
Page 12  
 
 National Electricity Regulatory Commission is envisaged to provide economic and technical 
regulations in the energy sector.  The Nigerian Gas Company is a subsidiary of the NNPC, responsible for the marketing and sale of gas. 
The basic philosophy behind these reforms is to en sure that the role of government in the 
sector is only regulatory, to allow for increased  private sector participation and competition. 
Apart from the applicable income tax rate of 30% for gas production, other major features 
encouraging a preference for the gas sector include  royalty at the rate of 7% on onshore and 5% 
offshore, investment tax credit at the current rate of 15%, and capital allowance at the rate of 20% per 
annum in the first four years, 19% in the fifth year and the remaining 1% in the books.  In addition, all 
gas development projects are taxed under the provisi ons of the Companies Income Tax Act (CITA) 
and not the Petroleum Profits Tax.  All dividends distributed during th e tax holiday shall not be taxed, 
while interest on loans for gas projects are tax de ductible, provided prior approval was obtained from 
Federal Ministry of Finance before taking the loan. 
(ii) Electricity 
The market will operate in the form of bilate ral trading arrangement between generators and 
distributors, and not by pool or centralised market, nor the third party system. 
Under the proposed Rural Electrification Strategy  and Plan, any shortfall in the capital and 
assets of the rural electrification fund may be covered by contribution rates as determined by the Commission from eligible customers and consumers,  after the Commission has been satisfied that 
retail power tariffs for such consumers have reached a level where they reflect the cost of electricity.  
While determining the contribution rate, the Commissi on shall take into consideration the impact of 
such rate on eligible customers and consumers who have to assume the burden of such contributions. 
Contributions payments for rural electrification sha ll be paid by eligible customers directly to 
the Rural Electrification Agency.  Consumers sha ll pay contribution to their distribution licensee and 
the distribution licenses shall compile such contribu tions and send them to the Rural Electrification 
Agency, which shall establish procedures for all collections and payments. 
Payment from Rural Electrification Fund shall be  made by the Rural Electrification Agency in 
consultation with the Minister of Power and Steel based on: 
(i) established objective and transparent crite ria for the geographical allocation of 
resources from the Rural Electrification Fund, includi ng the need for financial support from the Fund,  
progress made through previous disbursement; a nd the existence of local matching funding; 
 
(ii) develop and open, competitive and transpar ent procedure for making disbursements 
from the Rural Electrification Fund to individual projects, including the establishment of eligibility 
and selection criteria.  
Any person who fails to pay the Rural Electrifica tion Agency or a distribution licensee, within 
the prescribed time period, any amount owed, shall be liable to a fine not exceeding three times the 
amount owed. 
The Electric Power Sector Reform Bill is at the final stages of enactment by the National 
Assembly.  However, Nigeria would only confirm progress on the implementation of the legislation 
when it comes into force.  The El ectric Power Sector Reform Bill provides for clearly defined market 
rules and adequate trading arrangements, and a cost  reflective tariff structure.  These provisions are 
expected to minimise the conditions and actions th at may hamper the reform programme when prices WT/TPR/M/147/Add.1 
Page 13  
 
 
 are liberalised.  Nigeria further clarifies that there is no ceiling for foreign ownership in the electricity 
sub-sector. 
(3) M ANUFACTURING  
Nigeria continues to intensively pursue polic ies on export-led growth by emphasising the 
development of non-oil products for effective expor t diversification.  The incentive structure is 
expected to shift more resources into export produc tion.  Exchange rate and tax policies are also 
geared towards ensuring that Nigeria's export pr oducts compete effectively in the international 
market.  In view of the overall infrastructural de ficiencies and the fragile nature of the macro 
economy, increase of the contribution of the non-oi l sector to the economy is largely dependent on 
overcoming supply-side constraints rather than more market access.  The current policy form 
therefore, is to increase efficiency in production an d infrastructure as part of the broad strategies for 
revamping the economy. 
(4) S ERVICES  
(i) Financial services, including insurance 
Nigeria recognises the strengthening of the quality of the banking system as an important 
element towards a successful development strategy.  The current reform to increase the capital base of 
commercial banks from N2.0 billion to N25.0 billi on by December, 2005 is consistent with this 
objective.  Other banking reforms, including measu res relating to prudential guidelines are aimed at 
reducing the unnecessary developments observed in the banking system.  The Central Bank of Nigeria 
also enjoys increased autonomy to  ensure effective supervision. 
Nigeria has fully liberalised ownership and par ticipation by foreign entities in all sectors of 
the economy.  However, the country is yet to attr act investment by foreign banks in the financial 
services sub-sector.  The absence of 100% forei gn owned banks in Nigeria cannot therefore be 
attributed to any restriction on market access.  The presence of three foreign banks with majority 
foreign-held shares is evidence that 100% ownership is possible. 
A written answer would be provided to questi ons by the US and EC at a later date. 
(ii) Communication/Services 
The on-going reforms in the telecommunications sector in Nigeria are driven by the National 
Telecommunications Policy of 2000 and the Telecomm unications Act of 2003.  The priorities of the 
reforms are to connect Nigeria with the rest of  the world as well as make communications easier in 
the country.  The reforms are meant to improve teledensity, generate employment and increase 
investment and efficiency in the telecommunications sector. 
Wireless services are expected to complement  the wireline services in terms of improving 
access.  Nigeria, nevertheless, is promoting competition in the telecommunication sector.  There are plans to allow further competition in all market segments of the industry by the Nigerian Communications Commission (NCC).  Further deregula tion of the sector should ensure competition.  
The NCC is committed to ensuring that operators pl ay according to the rules, in order to reduce 
network congestion and inte rconnectivity bottlenecks. 
Nigeria is yet to adopt the WTO telecommunica tions Reference Paper.  The Government is 
presently reviewing the paper and would communicat e its position to the WTO, once it is rectified 
that the pro-competitive principles of the Paper are consistent with its policy objectives in the sector. WT/TPR/M/147/Add.1 
Page 14  
 
 Nigeria's Telecommunication Policy is aimed at increasing the country's participation in 
international telecommunications activities, includi ng the ITU and WTO.  Nigeria would expand its 
commitments as the need arises after careful review  of the situation, including ability to meet 
enhanced commitments.  The country intends to su bmit an Initial Offer within the framework of the 
ongoing GATS negotiations.  However, further GA TS commitments by Nigeria would depend on 
progress in other areas of the negotiations, especially  with respect to liberalisation in mode 4. 
Efforts to privatise NITEL are ongoing.  The cu rrent percentage owne rship by Government 
therefore remains at 100%.  Pres ently, the Request for Expression of Interest in the state-owned 
telecommunication entities have been advertised. 
(iii) Transport 
Written answers to the questions by the US and EC regarding transport services would be 
supplied later. 
(iv) Tourism services 
Written answers to the questions by the EC a nd Brazil on tourism services  would be supplied 
later. 
(v) Construction and distribution services 
Nigeria has fully liberalised and deregulated its  construction and distribution services sectors.  
Federal Government investments in construction companies have all been divested, although some 
states and local authorities still possess shares in some  construction companies.  Any foreign investor 
can establish commercial presence in Nigeria and own up to 100% of a comp any in any of these 
services sectors. 
Prior to the introduction of the Structural  Adjustment Programme (SAP) in 1986, the 
distribution services sector was largely dominated by wholesale and retail trade services.  Most of the products involved were imported.  Th e devaluation of the naira exchange rate and further restrictions 
on imports have led to a decline in the sector.  Activities in the sector are presently dominated by 
small businesses and informal sector operators.  Data on FDI in the distribution  sector is not available 
and would be insignificant even if it exists.  The sector, however, remains a major employer of labour.  
Nigeria expects that the current efforts to integr ate informal sector activ ities into the mainstream 
economy should increase its contribution in overall economic growth. 
(vi) Business services 
The legislation applicable to management consulting and services related to management 
consulting does not discriminate against foreign service suppliers, except that operators may be 
required to possess requisite qualifications and must  be accredited by the relevant professional bodies 
where applicable.   
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