RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/147 
13 April 2005  
 
(05-1489) 
Trade Policy Review Body Original: English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
NIGERIA 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Nigeria is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Nigeria. Nigeria WT/TPR/G/147 
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CONTENTS 
Page 
I. INTRODUCTION 5 
II. ECONOMIC ENVIRONMENT 6 
 (1) O VERVIEW  6 
 (2) S ECTORAL PERFORMANCE  7 
(i) Agriculture 7 (ii) Manufacturing 8 
(iii) Solid minerals 9 
(iv) Services 9 (v) Energy 9 
(vi) Communications 10 
(vii) Tourism 11 
III. STRUCTURAL REFORMS 12 
(1) D
EREGULATION  12 
(2) P RIVATISATION  13 
(3) T RANSPARENCY  13 
(4) P ORTS AND CUSTOMS REFORMS  13 
IV. TRADE POLICIES 14 
(1) T RADE POLICY OBJECTIVES AND DEVELOPMENTS  14 
(2) E XPORT REQUIREMENTS  15 
(3) M ULTILATERAL AND REGIONAL TRADING ARRANGEMENTS  15 
(i) WTO 15 
(ii) ACP-EU Cotonou Partnership Agreement 16 (iii) U.S. AGOA 16 
(iv) ECOWAS 17 
(v) NEPAD 17 (vi) Bilateral trade agreements 17 
V. NEW INITIATIVES 18 
 Nigeria WT/TPR/G/147 
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I. INTRODUCTION 
1. This review falls within the period of the r estoration of democratic governance in Nigeria, 
after one and a half decades of military dictatorship. The present Administration has, therefore, been beset with the serious challenges of bringing about stable macroeconomic environment for the 
promotion of the socio-economic growth needed for profitable trade and investment. Upon inception 
at the end of May 1999, the Government announced  that it would fundamentally restructure the 
economy as part of the overall policy goal of good governance. While the socio-political elements 
include transparency and accountability, the econo mic dimension involves continued emphasis on 
liberalisation privatisation and widesp read reforms of economic institutions. 
2. As a demonstration of this change in directi on, the Federal Government lays much emphasis 
on the need for fiscal discipline and the need to cu rb waste in public expenditure. An open system of 
periodic disbursement of the funds in the Fe deration Account among Fede ral, State and Local 
Governments has been established as a permanen t feature. Also, at the Presidency, the Budget 
Monitoring and Price Intelligence Unit (BMPIU), was set up to ensure that all government 
procurement contracts comply with Due Process requi rements. This has contributed immensely to the 
improvement of the quality of government inv estment programmes and reduced corruption in the 
contracting system, thereby leading to savings of about N118.0 billion as at September 2004. Among 
other anti-corruption institutions established durin g the review period are the Independent anti-
Corruption Practices Commission (ICPC) and the Economic and Financial Crime Commission (EFCC). Both have been active in prosecuting economic crimes.  
3. Government service delivery through Service Charter Compact with all Nigerians 
(SERVICOM) has continued to yield fruitful resu lts in several public institutions and other areas. 
These include the National Agency for Food an d Drug Administration and Control (NAFDAC), 
Nigerian Postal Service (NIPOST), Corporate Affairs Commission (CAC), Passport Office and land registration in the Federal Capital Territory (FCT). 
4. The critical state of the economy resulting from th e influence of the long period of military 
rule is still highly discernible. With the fresh breat h of freedom, people tend to resist the initial pains 
of any corrective measure. This would tend to explai n the unusual spate of labour strike actions staged 
against the effects of any increase in the pri ce of petroleum products. The ethnic and religious 
disturbances in some parts of the country and those in the petroleum producing areas took some toll on economic activity. Consequently, the on-going reform s have not yet been able to produce much of 
the expected results. Thus, Gross Domestic Product (GDP) showed a growth rate of 0.94 per cent in 
1999 and rose rather unsteadily through 5.44, 4.60  and 3.48 per cent, respectively in 2000, 2001 and 
2002 to 10.24 per cent in 2003. GDP structure still rema ins relatively rigid as the contribution of the 
major components trended slowly. Agriculture a nd Crude Petroleum accounted for averages of 35.7 
and 31.8 per cent, respectively while Wholesale and Re tail Trade contributed 13.1 and 12.6 per cent, 
respectively. The only sector that showed positive response, was communication, which from 0.11 per 
cent of GDP in 1999, rose to 0.21 per cent in 2003.  Th is is apparently a reflection of the effect of the 
deregulation policy in the sub-sector. At the averag e growth rate of 4.38 per cent, the manufacturing 
sector remained unimpressive due largely to infrast ructural problems and adverse effects of unbridled 
imports of fake and sub-standard goods. 
5. Fiscal deficit declined from 8.4 per cent of GDP in 1999 to 2.8 per cent in 2003, reflecting 
some measure of Government restrained expendi ture profile. The deficit, which amounted to 
N202.7 billion in 2003, showed the worsening impact of debt service burden. An external debt of 
about $34.0 billion at the end of 2004, (from US $32.9 billion) constituted a major constraint on WT/TPR/G/147 Trade Policy Review 
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economic growth. The debt overhang calls for a sustainable solution, as the present system of arrears 
accumulation seems not to be a very viable strategy. 
6. Poverty alleviation constitutes an importan t aspect of national policy. The 2003 Federal 
Office Statistics (FOS)/UNDP survey showed that  over 70.0 per cent of Nigerians live below the 
poverty line. Various poverty alleviation programme s have been introduced at all levels of 
Government, Federal, State and Local. Among these is the National Poverty Eradication Programme 
(NAPEP). Through this programme both rural and urban poor communities are targeted and assisted with the provision of micro-credit and other productive assets. 
7. A Medium-Term Economic Framework, th e National Economic Empowerment and 
Development Strategy (NEEDS), was introduced towa rds the end of this review period, covering 
2003-2007, at the Federal Government level. The NE EDS is a medium-term pl an aimed at achieving 
poverty reduction, wealth creation, employment gene ration and value re-orientation. Its overall thrust 
is to grow a broad-based private sector-led econo my. The plan will be the basis for all government 
fiscal operations. 
8. As from 2004, the States have also replicated the plan into the State Economic Empowerment 
and Development Strategy (SEEDS), which the Lo cal Governments will subsequently adopt.  
9. Nigeria pursues its economic and trade policies along multilateral, regional, sub-regional and 
bilateral levels. At the multilatera l level, the country is a member of the World Trade Organisation 
(WTO) and remains committed to the principles of the multilateral trading system.  Nigeria is a principal and founding member of the New Partne rship for Africa's Development (NEPAD) which 
came into force in October 2001. The country is also a key member of the Economic Community of 
West African States (ECOWAS) and contributes significantly to the economic integration of the sub-region. It maintains bilateral trade and economic re lations with many members of the United Nations. 
At each of these levels, Nigeria realises the need  for a well-informed, stable, comprehensive and 
transparent trade policy, for the country to eff ectively and fully benefit from the global trading 
system.  
II. ECONOMIC ENVIRONMENT (1) O
VERVIEW  
10. Developments in the economy during the review  period were rather unsteady, although not 
without improvement in some sectors. Average GD P growth rate was 4.4 per cent, compared with 
3.5 per cent recorded during the last review, 1995-1 998. The uneven trend as indicated earlier in the 
GDP which grew at the rate of 0.94 in 1999 to 10.24 per cent in 2003 was contingent on the price 
movements on international crude oil market, the emergence of natural gas and favourable 
agricultural production. Earnings from crude oil rose from N106.00 billion in 2002 to N131.34 billion 
in 2003, resulting from increases of Nigeria's O PEC quota from 1.787 million barrels per day (mbd) 
in the preceding year to 2.018 mbd in 2003. Averag e price increased by over 16.0 per cent and the 
production of natural gas increased by 11.3 per cent during the period. Agriculture attained a growth 
rate of 6.1 per cent during the review period. 
11. The Communication sub-sector, though relativel y small, showed significant improvement, 
owing largely to the deregulation of the services, beginning in 2001. Its contribution to the GDP nearly doubled in 2003. The contribution of manufact uring remained low due to factors, including 
infrastructural inadequacies, high cost of finance,  adverse effect of an upsurge in imports and 
consequently low capacity utilisation. The effec tiveness of monetary policy was dampened by the 
problem of excess liquidity in the banking system for the most part of the review period. This was Nigeria WT/TPR/G/147 
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largely attributed to the expansionary fiscal ope rations of the Federal and State governments, 
accentuated by the demand pressure in  the foreign exchange market. Fi scal deficits of 8.4, 2.9 and 
4.0 per cent of the GDP were recorded in 1999, 200 0 and 2001, respectively. This increased in 2002 
and 2003 to 5.1 and 5.5 per cent of the GDP, respec tively. As at the end of September 2004, however, 
resulting from the action of the Federal Government, which exercised some restraint in the spending 
of the additional revenue from crude oil sales, excessive public expenditure was curtailed.  
12. Government monetary and exchange rate polic y is issued by the Central Bank. The main 
objectives have been aimed at ensuring the maintenan ce of internal and external balance as well as the 
achievement of sustainable output growth and po verty reduction. Others are reduction in excess 
liquidity in the banking system, single-digit infla tion rate; sustenance of market-based interest rate 
regime; achievement of balance of payments viabilit y; promotion and maintenance of financial sector 
stability; and the achievement of external reserve st ock that could support at least six months current 
import cover. 
13. For the most part of the review period, stre nuous efforts were made by the Monetary and 
Fiscal Authorities to achieve these objectives. Vari ous financial and monetary initiatives were 
introduced, including moral suasion by the Central Ba nk to influence the interest rates regime, 
constant mopping up operation of liquidity in th e system, the reintroduction of the Dutch Auction 
System (DAS) of exchange rate management; a nd determined efforts of building up of foreign 
reserves. As at September 2004, indicators show ed that these efforts had started bearing positive 
results. These are in the following areas: a fiscal defic it of 1.5 per cent of GDP; relative stability of the 
Naira exchange rate; 16.1 per cent inflation rate; and foreign exchange reserves of over US$16 billion 
at the end of December 2004. 
14. The government is currently researching on how to modernise and streamline the informal 
sector activities, with a view to making it more pr oductive. A substantial volume of activities of the 
informal sector of the economy falls within the services sector. 
(2) SECTORAL PERFORMANCE  
(i) Agriculture 
15. Agriculture made appreciable progress during th e review period. With 4.4 per cent average 
rate of growth during 1999-2003, and annual ra tes of 6.1 and 7.0 per cent in 2003 and 2004, 
respectively, this represented the highest stride  amongst the major components of the GDP. The main 
factors which favoured the outcome included adequate  rainfall; low incidence of pests; better post-
harvest handling; supply of high yielding and diseas e resistant seeds/seedlings; and intensification and 
application of off-farm research technologies. Th e remarkable improvement in 2002 and 2003 was 
largely ascribed to Federal Government support through its new agricultural policy, which assigned 
promotional and supportive roles to the government but leaves actual investment to the private sector. 
This involved the mobilisation of various co mmodity associations and the establishment of 
Presidential Committees on rice, cassava, fisheries,  livestock, vegetable oils and tree crops. The 
Committees were mandated to initiate programmes th at would boost productio n for both consumption 
and export. Moreover, the ban on importati on encouraged increased domestic production. 
16. The Special Programme for Food Security (SPFS) was set up to achieve food sufficiency for 
and reduce rural poverty. The establishment of R oots and Tuber Expansion Programme (RTEP) was 
aimed at sustainable increases in cassava, yam, cocoyam and potato production. The SPFS and RTEP 
took off in 2003. Several multi-purpose irrigation da ms were constructed and commissioned all over 
the country. The Federal Government initiated th e programme of buyer-of-last-resort, guaranteeing WT/TPR/G/147 Trade Policy Review 
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farmers a profitable floor price for excess products so as to further encourage production.  A very 
notable result of these efforts in 2004 was that  for the first time the United Nations World Food 
Programme (WFP) purchased from Nigeria's grains reserves over 150,000 tons, and the agency is 
setting up an office in Nigeria fo r such transactions in future. 
17. In spite of this successful outcome, some im portant constraints still remain. These include 
occasional shortfall in the supply of inputs such as fertiliser, farm power and agricultural tools and 
implements, inadequate funding of extension ser vices and seasonal flooding of farmlands in certain 
areas. Quela birds also caused substantial loss of harvest to farmers in some northern states. In 
addition, increases in petroleum products' prices a nd the poor state of rural roads occasioned increased 
production costs.  The fishing sub-sector was constrai ned by rise in the cost of outboard engines and 
fishing nets, and slow-downs a nd even operational stoppages resulting from communal crises in the 
Delta region of the country. 
18. Prices of export commodities were constantly  depressed especially during good harvests and 
sluggish demand. 
(ii) Manufacturing 
19. During 1999-2003, the contribution of the manufacturing sub-sector to the GDP averaged 
about 4.4 per cent. This has been the general tr end of the sub-sector since the discontinuance of 
foreign input based manufactures in the second-half of 1980s.  Performance during the review period 
at best showed moderate recovery. Thus, from a decline of 3.9 per cent in1998 the sub-sector recorded some improvement of 3.5 per cent in 1999. In 2000 , only a bare increase of 0.4 per cent was made. In 
the following two years an equal rise of 2.9 per cent was recorded, which again fell to 1.1 per cent in 
2003 
20. Among the factors influencing this modest im provement in 2001-2002 were more regular 
electric power supply and a more favourable business cl imate, especially influenced by availability of 
petroleum products.  Moreover, the reforms at the ports drastically reduced transactions period, and 
there was general restoration of investors’ confid ence. The introduction of comprehensive inspection 
of imports at the ports made importers of manufact ures pay appropriate duties, and slightly improved 
the competitiveness of local manufactures. Intensif ied and enhanced surveillance by the National 
Agency for Food and Drug Administration and Control (NAFDAC) and the operations of the 
Standards Organisation of Nigeria (SON) helped to check influx of fake and substandard products and 
their local counterparts. Also, increased utilisa tion of the Small and Medium Industries Equity 
Investment Scheme (SMIEIS) fund resulted in increased production. 
21. The constraints on manufacturing production are st ill real and strong, and this explains the 
low level of industrial capacity utilisation, wh ich was put at about 46.2 percent in 2003. These 
problems included low level of demand for local ma nufactures, influx of cheaper imports, especially 
second-hand goods. This was more pronounced in te xtiles, footwear, leather goods, cement (before 
the recent restriction), vehicle parts, radio, television and communication equipment sub-groups. 
Another source of weak aggregate demand was labour lay-offs in the private sector resulting mainly 
from contraction of production and factory closures.  Other challenges of this sub-sector include 
increased costs of production which resulted from equipm ent deficiency due to old age; infrastructural 
inadequacy, especially electricity and bad roads; incr eased cost of finance occasioned by high interest 
rates and the depreciation of the Naira exchange ra te, given the high dependen ce of local industries on 
imported inputs and spare parts. The situation was worsened by incidents of  civil disturbances in 
some parts of the country, as well as the general insecurity of life and property, which disrupted 
production programmes and discouraged investment. Nigeria WT/TPR/G/147 
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(iii) Solid minerals 
22. This sub-sector has suffered neglect and rela tive under-development, especially since crude 
oil gained ascendancy as Nigeria’s major export. Th e 1946 Ordinance was revised in 1999, to ensure 
an orderly, attractive and conducive atmosphere fo r the development and exploitation of Nigeria's 
solid minerals. The government has offered generous incentives to attract investors and prospectors to 
this sub-sector, including tax holidays, lower in come taxes, deferred royalty payments, capital 
allowances and even exemption from import duty paym ents. The major solid mi nerals currently being 
exploited include coal, limestone, columbite, marble and cassiterite. 
23. Production in 1999 improved slightly by 2.6 per cent to 2,078 million tonnes in contrast with 
the decline of 39.4 per cent recorded in 1998. Si milar improvements were recorded between 2000 and 
2002. In 2003, however, total output fell by 36.5 per cent to 8,270 million tonnes from the level of 
13,026 million tones a year earlier. 
24. The main factors, which accounted for th is relative improvement, included the new 
government policy measures aimed at promoting the growth of the sub-sector, and improvement in demand by end-users. On the other hand, the constr aints to continued and higher performance in 2003 
mainly involved the shift to more environmenta lly friendly sources of power generation (petroleum 
and gas) by major consumers of coal, particularly  the Nigerian Railways Corporation (NRC) and the 
National Electric Power Authority (NEPA).  A fall in demand for limestone was also recorded following the decline in domestic production of cement. 
(iv) Services 
25. Nigeria’s services sector accounted for an average of 25.13 per cent of the GDP during 1999-
2003. Until recently, when the policy of privatisati on and deregulation was introduced, the sector was 
almost entirely dominated by government ownership. 
26. Resulting from the unimpressive performance of sub-sectors, which included communication, 
air services, shipping, and even banking services, public ownership divestment has progressed rapidly. Hence, the National Shipping Line, an d more recently, the Nigeria Airways had been 
liquidated in the transport sector. 
27. The Federal Government has extensively re linquished its interest s in the banking and 
insurance sub-sector. A far-reaching reform is bei ng introduced in the banking segment which will 
result in a fewer number of banks with stronger capit al base that can contribute more meaningfully to 
the financing of economic development. As from December 2005 the capital base of commercial 
banks must not be less than N25.0 billion as against the current minimum of N2.0 billion. At the end 
of this exercise, it is expected that the banks w ill be much less in number than the existing 89, as 
operators are making efforts to re-cap italise through Mergers or Acquisitions. 
(v) Energy 
28. The National Electric Power Authority (NEPA) is the state monopoly with the responsibility 
to generate, transmit and distribute electricity in Nigeria, producing 99.5 per cent of total electric 
power, while the remaining 0.5 per cent is the ther mal energy purchased from private companies.  The 
performance of this sub-sector has been inadequate to meet the needs of the economy, due largely to 
years of neglect.  Developments since 1999 have been mixed.  The average increase in electricity 
generation of 7.02 per cent was achiev ed rather unevenly.  Much of this was through rehabilitation of 
generating equipment and higher utilisation of existing capacity. WT/TPR/G/147 Trade Policy Review 
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29. Electricity generation rose to 16,088.7kwh in 1999 showing an increase of 6.4 per cent above 
the level of 15, 110.0 in 1998. A decline of 8.7 pe r cent occurred in 2000 as a result of deterioration of 
most generating equipment, whic h had suffered poor maintenance over the years. An appreciable 
increase of 22.6 per cent was recorded in 2001 wh en 18,009.6 kwh was attained. In the following 
year, however, this declined to 16, 088.7 kwh or by 10. 7 per cent. The highest point reached in power 
generation was in 2003 with 20,183 .2 kwh, representing 25.5 per cent above the level of 2002. 
30. In addition to equipment deterioration, the ot her constraints which confronted electricity 
generation included decline in th ermal generation by 16.9 per cent in 2002; communal unrest in the 
gas/oil producing areas which disrupted gas transpor tation through pipelines to plants; and over-use of 
NEPA functional plants in Kanji, Jebba and Egbin. At the end of 2 004, NEPA attained the generating 
capacity of 4500 Megawatts (MW) compared with 42 00 MW in 2003. This was appreciable compared 
with the position of barely 2000 MW in May 1 999. The Government has planned for additional 
generating capacity of 1400MW by 2006. 
31. Nonetheless, there exists considerable power defi cit in Nigeria.  This has made the Federal 
Government to start encouraging private sector participation through Inde pendent Power Producers 
(IPP). In response to this, the Nigerian Agip O il Company (AGIP) has added an installation of 
350 MW under the scheme. Alternative energy a pproaches are also currently being considered, 
especially in rural areas.  
(vi) Communications 
32. The communications sub-sector is among thos e that have clearly benefited from the 
government policy of deregulation during the review period. Telecommunication has actually been 
revolutionised in Nigeria. In the postal segment, th e private sector continued to complement official 
efforts in communication service delivery. More priv ate participants were being enlisted in line with 
government policy. 
33. The deregulation of telecommunication in Nigeria from 2000 took very rapid paces. The 
Nigerian Communication Commission (NCC) was gi ven the responsibility to create a regulatory 
environment for the provision of efficient and eff ective market through the divestment of government 
equity interest in the sub-sector, as well as enhanci ng increased private sector participation through an 
appropriate regulatory framework. This internal re form within the Nigerian Telecommunications Ltd 
(NITEL) could not be successfully carried out as the sub-sector remained inefficient and ineffective 
due to factors, including equipment obsolescence,  monopoly of service provisioning, management 
problems, a cumbersome billing system and admini strative red-tapism. As at the end of 2000, 
operational telephone lines were 426,500 ; and service quality remained poor. 
34. This unsatisfactory situation led to the full de regulation of the sub- sector in March 2001 
when NCC licensed the Mobile Telecommunication Network (MTN) and ECONET Wireless to operate the GSM (Global System of Mobile) tel ecommunication. These companies started operations 
in August and by December 2001, about 300,000 ce ll phones had been sold, bringing operational lines 
to about 726,500 and a teledensity of 1: 165 from the position of 1:284 in 2000. 
35. There was considerable improvement in 2002 when NITEL operations showed that total 
number of telephone lines increased by 20.3 per cent,  from 767,862 in 2001 to  932,424 in 2002. The 
deregulation of the Telecommunication sector resu lted in immense improvement in communication 
services. MTN and ECONET increased their tele phone lines from 300,000 in 2001 to 1,660,000 in 
2002. When the phone lines of NI TEL were added, Nigeria’s teledensity became 1:51, a level much 
higher than the International Telecommunications Union’s (ITU) standard of 1:100. Nigeria WT/TPR/G/147 
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36. As at June 2003, NITEL had 510, 000 functionally connected lin es – 350,000 fixed; 120,000 
GSM and 40,000 analogue. Combined operationa l lines of MTN and ECONET increased from 
1,660,000 in 2002 to 2, 050,000, representing 23.4%. A new co mpany, the GLOBACOM, also began 
operations and as at the end of the year, Nigeria's teledensity improved furthe r, standing at 1:49, far 
above ITU's minimum standard of 1:100. 
37. The benefits which private sector involveme nt in this sub-sector has brought include 
innovation, wider coverage, competition, bette r services, mobilisation of new financing for 
telecommunication investment and employment. The sub-sector's contribution to the GDP rose from N
0.69 billion to N 0.83 billion in 2003. 
(vii) Tourism 
38. Nigeria's endowment for prosper ous tourism is overwhelming when  the riches of her weather, 
wildlife, water falls, historical relics, attrac tive beaches, rolling hills and the general warm-
heartedness of an active populace are taken into cons ideration. All these and other qualities informed 
the nation’s tourism policy of 1990 with the basic objective to make Nigeria "the ultimate tourism 
destination in Africa." 
39. The main thrust of the policy is to generate foreign exchange, encourage even development, 
promote tourism-based rural enterp rises, generate employment, accel erate rural-urban integration and 
cultural exchange. The strategies adopted include:  
− Provision of infrastructural facilities (water, roads, electricity, communications and hotels) in 
centres of attraction by government; 
− Concession of land whereby state governments would provide land without hindrance for 
tourism; and 
− Provision of fiscal and other incentives, such that tourism is treated as a preferred section like 
agriculture, with such incentives as tax ho lidays, tax rebate and soft loans. 
40. All these objectives have, however, not been rea lised due to several factors, including 
infrastructural and information deficiencies; be lated policy formulation and poor implementation; 
insecurity, negative attitudinal disposition towards t ourism and tourists; and extended family links 
which tend to discourage use of tourism facilities, e.g. hotels or guest houses. The sub-sector has 
therefore suffered relative neglect over the years, but the present Administration, within the review 
period, has continued to make some conscientious  efforts to revitalise tourism in Nigeria.  
41. The Federal Government has established the Ministry of Culture and Tourism. The Ministry 
is to work with the States and Local Governments to  implement the country's tourism strategies.  The 
Ministry also has the responsibility for policy research , planning, formulation, monitoring and funding 
of national oriented tourism infrastructure and the re presentation of Nigeria's interest in international 
tourism organisations.  Government has also c onstituted a Presidential Council on Tourism, drawing 
membership from relevant Ministries and State governments, with the President serving as Chairman. Furthermore, a Presidential Sub-committee on Private Sector Investment in the tourism industry has 
been inaugurated to among other things: 
− Identify factors discouraging private sector investment in the industry; 
− Highlight factors that encourage private sector participation; 
− Recommend measures that can be taken to encourage private investment; and 
− Recommend any other strategy that can move the tourism sector forward. 
−  WT/TPR/G/147 Trade Policy Review 
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42. A National Council on Culture and Tourism, headed by the Minister, is to assist in the 
achievement of these objectives. The membership of the Council includes State Commissioners in-
charge of Culture and Tourism, representatives of Travel Agents, Hoteliers and Catering Associations, 
Travel and Tour Operators and Boards of Air lines. State Ministries are responsible for the 
implementation of policies and directives from the Federal Ministry of Culture and Tourism, the 
initiation of projects, control of land allocation fo r tourism projects and their development in their 
respective states. Their responsibilities include regulating the operation of hotels and catering 
institutions and overseeing the State Tourism Boar ds. The Local Governments are responsible for 
allocating and identifying potentia l tourist attractions, serving as information centres, providing 
Tourist Guides, preserving and maintaining existing national monuments and museums.  
III. STRUCTURAL REFORMS 
(1) D EREGULATION  
43. The Economic Direction for 1999-2003 launched in August 2000 had as key principle, "the 
commitment to a market-oriented, private secto r-led economy with government serving as a catalyst 
and providing the enabling environment for the private sector to thrive". Even before then it had been 
realised that domestic capital would be inadequate to promote the rapid economic growth set out in 
the new industrial policy. It is, therefore, crucia l to attract foreign capital into all sectors of the 
economy, except areas where national security might be jeopardised. 
44. The direction of policy which inspires the restru cturing of the economy through liberalisation, 
privatisation and other measures is to make the c ountry more attractive to foreign investors. As a 
result of deregulation, industries now have greater  access to foreign exchange for their operational 
activities. In order to realise the objectives of dere gulation, Government has undertaken to repeal all 
legislation that have created public sector  monopoly in specific sectors of the economy. 
45. Among erstwhile government owned enterprises wh ich have been liquidated is the Nigeria 
Airways, in place of which a totally private se ctor-owned airline, "Virgin Nigeria" has been 
established, in partnership with Virgin Atlan tic Airways of the United Kingdom. The National 
Electric Power Authority (NEPA) is at present going through a restructuring process that will make it 
viable to be sold to the private sector. NITEL is an other enterprise that would soon be repackaged for 
sale to a core investor. 
46. As a result of government deregulation policy in 2004, an estimated US$1.0 billion in new 
foreign investments came into the non-oil sector of the economy.  The sectors, which received these 
new investments, include foods and beverages, leather goods, power genera tion, household goods and 
pharmaceuticals.  On its part, government has adopted  measures to provide an environment that is 
very conducive for the sustenance of macroeconom ic stability, improved gove rnance (transparency, 
accountability and anti-corruption crusade) and the provision of adequate socio-economic 
infrastructure and reduction in the cost of doing business. 
47. The deregulation of some sectors, especially the downstream sector of petroleum industry, 
has led to price increases as the immediate conseque nce. The resistance to these price increases led by 
the Nigerian Labour Congress (NLC) resulted in a sp ate of strike actions, which disrupted economic 
activities. The government is, however, convinced that increased competition would enhance efficiency and ultimately cause prices to fall once the situation stabilises. Nigeria WT/TPR/G/147 
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(2) P RIVATISATION  
48. The National Council on Privatisation (NCP) w ith its administrative arm, the Bureau of 
Public Enterprise (BPE) was inaugurated in July 1999 and given the responsibility of carrying out the nation’s privatisation and commercialisation programme . It is a core policy of the government, having 
been convinced of the inefficiencies and exte nsive waste of resources by the government-owned 
firms. 
49. In addition, privatisation was adopted with a view to reducing the financial burden on the 
national treasury, caused by many non-performing p ublic enterprises; improving economic efficiency 
and growth; and developing the private sector. The be nefits of this programme are already manifest. 
For instance, the GSM auctions and licensing of th e private telecommunication operators (PTOs) have 
brought about a revolutionary change in terms of improved communications. 
50. Naturally, there have been some areas of contr oversy, including disagreement over the public 
enterprises that should or should not be privati sed. Thus, enterprises like the Refineries, Nigeria 
Airways, and Nigerian Security Printing and Minti ng Company, were regarded by some as symbols of 
nationhood that should not be affected by privatisa tion.  Government, however, believes that any non-
performing assets should be sold. The privatisa tion process remains on course and government is 
determined to ensure that the program me is successfully implemented.    
(3) T
RANSPARENCY  
51. Promotion of transparency and accountability is  a key policy of the new Administration. 
Systemic corruption has been a major hindrance to Nigeria’s development in all spheres: social, 
economic and even cultural. It has given the count ry a bad image in the comity of nations with 
adverse effects, which include paucity of foreign investment. 
52. Since inception of in 1999, the present Admini stration has taken practical steps (legal, 
institutional and administrative) to stop this un wholesome attitude, and to improve the image of 
Nigeria. Among the institutional bodies established to  tackle the problem of corruption and economic 
and financial crimes are Independent Corrupt Practices and other related Offences Commission 
(ICPC) and Economic and Financial Crimes Commissi on (EFCC).  While ICPC has prosecuted over 
62 cases, the EFCC has put over 500 people behind bars as at the end of 2004. These agencies are working hard to secure convictions  and collaborating closely with law enforcement agencies abroad to 
trace bank lodgements and investments abroad by co rrupt Nigerians. A strong and effective anti-
corruption policy remains a priority of the government. 
(4) P
ORTS AND CUSTOMS REFORMS  
53. Some far-reaching reforms were introduced in Ni geria’s ports during the review period. These 
include the implementation of the Cabotage La w enacted in 2003 and a drastic reduction in the 
number of official agencies exercising authority in port transactions. Others are enhanced surveillance 
by National Agency for Food Drug Admini stration and Control (NAFDAC) and Standards 
Organisation of Nigeria (SON), which helped to reduce importation of fake  and substandard items; 
and the introduction of comprehensive (100 pe r cent) destination inspection of imports. 
54. The Cabotage law implementation now permits ocean steamers to move from harbour to 
harbour to load or unload cargoes. This is held to offer to the economy several advantages and benefits, including increase in tonnage, boost the capacity  of industry operators, i.e., local shipyards, 
transportation logistics, the financial sector and de velopment of human resources. Furthermore, it is WT/TPR/G/147 Trade Policy Review 
Page 14 
 
 
expected that the new environment would enc ourage investment within the domestic water 
transportation industry.  
55. The activities of over ten different government bodies involved in ports transactions hitherto 
caused much hardship and undue delays. Government  has taken steps to reduce the number to a few 
which have statutory duties of examining and cleari ng of imports. In addition, the time within which a 
genuine importer would evacuate his goods from the por ts has now been cut to forty-eight hours. The 
introduction of comprehensive destination inspectio n has yielded appreciable results by enhancing 
government revenue through the ports. It has also had salutary effects on the manufacturing sector. 
56. The Nigeria Customs Service (NCS) itself has b een a subject of reforms which have resulted 
in improved revenue collection;  more effective anti-smuggling activities; higher operational and 
welfare packages for the officers and men; and enhancement of technical and technological equipment acquisition and operational innovati on. Regarding revenue collection,  NCS has consistently exceeded 
its revenue targets annually since 1999 when th ese reforms were introduced. Thus, the organisation 
collected N86.19 billion, N10.19 or 13.40 per cent over and above estimated target for that year. 
Again, in the year 2000, the NCS exceeded the target of N100.00 billion by N1.1 billion. 
57. Although the volume of smuggled goods has cons iderably reduced, the NCS is now better 
equipped to reduce them further. Its air wing has been  resuscitated with two operational aircrafts, thus 
complementing the land patrol activities. Seizur es of contrabands as well as arms and ammunition 
have been made at many ports and points of entry by the Customs. 
58. As operational effectiveness has been enhanced so also have the welfare packages increased. 
These include better health services, accommodation, transportation, recreational facilities as well as 
staff training, development and promotion. In the area of operational innovations, the UNCTAD 
Automated System of Customs Data (ASYCUDA)  has been adopted. Th e ASYCUDA software 
alongside full computerisation of the service is now being used for revenue collection. 
IV. TRADE POLICIES 
(1) T
RADE POLICY OBJECTIVES AND DEVELOPMENTS  
59. The goal of policy is to lay a solid foundation for fully exploiting Nigeria’s potentials in 
international trade and helping it to become the ga teway to West and Central Africa. Much of this 
potential has not been realised because of some c onstraints including the high cost of doing business 
in Nigeria; inadequate infrastructure; poorly implemented incentives (fiscal and tariff regimes); 
massive smuggling; lack of standardisation; and unfavourable international trade rules and practices. 
In addition, other policy challenges still remain especi ally in the application of tariffs and exemptions, 
transaction costs at ports, customs clearance procedur es, and the use of import bans. Nigeria's tariff 
and non-tariff barriers have on average exceeded those of other ECOWAS countries. 
60. The thrust of policy, therefore, is to drasti cally reduce the uncertainty and unpredictability of 
the trade policy regime, harmonise trade practices  with those of other ECOWAS countries and 
thereby facilitate the full integration of the sub-re gion.  A new Trade Policy was therefore adopted in 
2002 to provide a roadmap for private sector opera tors as well as demonstrate Government’s policy 
orientation, focus and aspirations in the trade s ector.  The new policy framework will continue to 
guide interactions with trading part ners and ensure that Nigeria’s national interest is protected at all 
times. 
61. Due to the virtual absence of a rules-based transparent mechan ism for testing, certification 
and registration of certain categories of products and the resultant implications for public health and Nigeria WT/TPR/G/147 
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safety as well as intellectual property rights prot ection, Government in 2003 and 2004, as a policy 
measure reintroduced import prohibitions on such pr oducts.  Several complaints have been received 
from trading partners regarding these restrictions a nd Government is determined to comprehensively 
address this matter so that any damage, which may ha ve been done to the country’s image abroad can 
be expeditiously rectified in order to enhance the overall confidence of the international community in 
the current economic reforms. 
62. To that end, an Inter-Agency process involvi ng the key members of the Economic Team has 
been put in place to determine the best policy options available to Government.  Accordingly in the 
context of the fiscal policy measures in the 2005 Budget, Nigeria has fully committed itself to 
adopting the UEOMOA tariff structure within th e framework of the ECOWAS Common External 
Tariff (CET) programme, which comprises only four tariff bands.  A new eight-year tariff structure would also come into effect by the end of June 2005 and some of the current prohibitions would be 
appropriately transformed into that structure.  The remaining items will subsequently be fully 
eliminated by June 2007. 
63. Nigeria would want to assure all Members that the current bans are essentially transitory and 
there is no intention to apply them indefinitely.  Government also wishes to solicit the continued 
support and understanding of all Members as it end eavours to, in the interim, fully address the 
specific concerns of trading partners.  In sp ite of the present challenges, these measures do not 
undermine Nigeria's commitment to the principles and objectives of the WTO, but should be seen as a 
conscious effort to contain certain unwholesome practices by unscrupulous individuals that are 
injurious to the majority of the citizenry and over all national economic interests.  By the end of the 
restrictive measures, Government would have ha d enough time to put in place a transparent rules-
based mechanism for the testing, certification and inspection of imports, as a well as for the 
enforcement of other appropriate  border measures, including IPRs. 
(2) E
XPORT REQUIREMENTS  
64. Non-oil exporters are required to register with the Nigerian Export Promotion Council 
(NEPC). This involves the submission of a comple ted application form along with copies of the 
Certificate of Incorporation and Memorandum and Articles of Associa tion. For co-operative societies, 
evidence of registration is required in place of certificate of incorporation. Registration takes place within one week of submission of all required do cuments. Exporters are required to renew their 
registration annually by submitting the company's curre nt tax clearance certificate; evidence of export 
performance within two years; and a certified true copy of "Form C.O.7" showing the particulars of 
the Directors of the company. 
(3) M
ULTILATERAL AND REGIONAL TRADING ARRANGEMENTS  
65. Nigeria remains committed to the principles a nd objectives of the multilateral trading system. 
In line with this commitment, Nigeria pursues a liber al trade and investment policy, which aims at 
greater liberalisation and improved market acces s, by lowering tariff and non-tariff barriers. 
Furthermore, Nigeria is actively involved in the ongoing international trade negotiations in order to 
assist in creating favourable market access conditions  for the country’s exports, as well as ensure the 
full integration of the national economy into the global economy. 
(i) WTO 
66. As a founding member of the WTO, Nigeria considers the Doha Development Agenda 
(DDA) adopted at the 4th WTO Ministerial Conference in Doha, Qatar, in 2001, as the basis for 
positively responding to the challenges faced by de veloping countries in the international trading WT/TPR/G/147 Trade Policy Review 
Page 16 
 
 
system. Thus, the government welcomes efforts made to put the negotiations back on track and calls 
for the renewed commitment of the entire membersh ip, particularly the developed country members, 
to the spirit of the DDA. This is to enable the WTO achieve its cardinal objective of fully integrating 
all members into the Multilateral Trading system. 
67. Nigeria expects that at the end of on-going  negotiations, the WTO would have achieved 
substantial reduction in tariff and non-tariff barrier s faced by its non-oil export products. These 
products include processed agricultural and food products; and labour inte nsive manufactured goods, 
the expansion potentials which have been seriously inhibited by tariff escalation, in developed country 
markets. These barriers also imp act negatively on government's efforts at diversifying the country's 
economic base, with emphasis on the promotion on non-oil exports, through the processing of such 
products as cocoa, oil seeds, roots and tubers, tropi cal fruits, nuts; wood and rubber products, as well 
as fisheries and hides and skins. Furthermore, the high level of export subsidies and domestic support 
measures deployed by the developed countries in thei r agricultural sectors, continue to distort trade, 
dampen prices and serve as obst acles to expansion of local production of agricultural products. This 
has led to a high level of unemployment and the closure of processing plants.  On the whole, Nigeria, 
in partnership with other Members, is committed to  delivery the benefits of global trade through the 
successful conclusion of the DDA negotiations.  
(ii) ACP-EU Cotonou Partnership Agreement 
68. This replaces the former erstwhile Lome C onvention. The new Agreement introduces a new, 
concept of geographical configuration in which the African, Caribbean and Pacific (ACP) Group of 
countries would constitute geogra phically contiguous regional nego tiating groups for the Economic 
Partnership Agreement (EPA) with the European Union. Nigeria belongs to the West Africa 
(ECOWAS + Mauritania) Group. The main objective of  the EPA is to promote the deepening of the 
regional integration process and sustainable econom ic development in the West African region.  
Nigeria is actively involved in the EPA negotiation process and has significantly contributed to the 
adoption of the road Map which addresses some of the key concerns relating to deepening of the 
integration process in West Africa, improving competitiveness capacity building and upgrading as 
well as the overall preparation and conduct of th e negotiations.  In accordance with the approved 
indicative schedule, the final phase will focus on  negotiations on market access for goods and 
services.  The Agreement will concluded in  2007 and shall enter into force on 1st January, 2008. 
69. Since the main objectives of the EPA negotiations  are based on priorities determined by the 
region, Nigeria expects that the national the EPA  would be complementary and mutually supportive 
of its development strategies.  In that regard, a number of impact assessment studies are being carried 
out in collaboration with donors to ensure that both the national and regional positions reflect the 
interests of all stakeholders. 
(iii) U.S. AGOA 
70. The United States African Growth and Opportuni ty Act (AGOA), since its establishment in 
2000, has provided veritable trade opportunities for Ni geria and other Sub-Saha ran African countries 
through preferential market access.  Nigeria has also been granted the status of an eligible country 
beneficiary under the Act.  The AGOA Textile and a pparel Visa was also granted to the country in 
2004 to enable it enjoy the textile and apparel benefits  of the programmes.  In order to take advantage 
of the opportunities offered by the AGOA, th e Government has embarked on nation-wide 
sensitisation and enlightenment workshops and semina rs for all relevant stakeholders.  Government 
has also identified some key products like textiles a nd apparels, leather and f ootwear, handicrafts, etc., 
in which Nigeria has strong potential export capacity . It is expected that the extension of AGOA Nigeria WT/TPR/G/147 
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beyond 2008 would give businesses the confidence to  make long-term investments in Nigeria and 
other Sub-Saharan African countries.  Nigeria ther efore hopes to continue to use the AGOA as an 
important window of opportunity to create wealth , promote investment a nd generate employment. 
(iv) ECOWAS 
71. As one of the main founders of the ECOWAS,  Nigeria remains committed to the complete 
realisation of the organisation’s regional integrati on initiatives, particularly in the area of economic 
and trade cooperation. As part of ways of attain ing these objectives, efforts are being made to adopt a 
common trade and competition policy, in the stepwise process of integrating African economies, as well as the adoption of a common currency under th e West African Monetary Zone Protocol. Other 
challenges being addressed include the removal of all non-tariff barriers to trade, harmonisation of 
taxes and introduction of a common external tariff (CET) regime in West Africa.  Nigeria also 
remains committed to ensuring peace a nd political stability in the region. 
(v) NEPAD  
72. As a founding member country of the New Pa rtnership for Africa's Development (NEPAD), 
Nigeria also remains fully committed to the obj ectives and priorities of this visionary regional 
initiative. Efforts are being made to actively mobili se the private sector as part and parcel of the 
ownership of this initiative. The objectives of NEP AD are similar to the United Nations Millennium 
Development Goals (MDGs), especially in the areas like the eradication of poverty and launching Africa on the path of sustainable economic growth and development. 
73. The three key themes NEPAD are: 
− sectoral priorities in domesticating production of essential raw materials and provision of 
efficient infrastructure, human resource s development for skilled manpower, etc; 
− resource mobilisation that would enable the achievement of annual GDP growth rate of 
7.0 per cent; and 
− the Peer Review Mechanism. 
74. Significant progress has been made in the implementation of the NEPAD in Nigeria.  An 
extensive programme of sensitisation is currently be ing carried out by the NEPAD Secretariat, while 
the articulation of projects for funding and the supporting institutional structures are also being 
developed. 
(vi) Bilateral trade agreements 
75. Bilateral trade agreements (BTAs) remain one of  the most potent ways for countries to pursue 
matters of mutual self-interest and benefits in terms of inflow of foreign investment, access to 
technology, capital, industrial inputs and consum er goods. It also provides vital markets for a 
country's own products and thus e nhances its trade, economic growth  and development. Given these 
advantages, Nigeria like every other country continu es to explore and maintains mutually beneficial 
bilateral relations with other trading partners.  Currently, Nigeria has negotiated and signed BTAs 
with the United States, Tunisia, Egypt, Cuba Viet nam, Niger, Canada, Indonesia, South Africa, Iran, 
Algeria, Peoples Republic of China, the Gambia a nd Republic of Benin.   Arrangements are also 
being made for the negotiation of Free Trade Agreement with Egypt and South Africa. WT/TPR/G/147 Trade Policy Review 
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V. NEW INITIATIVES 
76. Economic and trade activities during the next few years will be greatly influenced by the 
reform policies contained in the NEEDS.  The three pillars of NEEDS are, namely, empowering people, promoting private enterprise and changi ng the way government does its work. Empowering 
people aims at creating opportunities for them as pr oducers and consumers. By  implication, this 
means creating employment and alleviating povert y. Both of these are best done through the 
prosperity of the private sector. 
77. In promoting private enterprise, the on-going po licies of privatisation and deregulation will 
continue to be fostered. In this regard, govern ment-owned enterprises e.g., NITEL, NEPA, the Steel 
Mills, the Refineries, etc. are being prepared for priv atisation.  Government is determined to divest 
from them.  At the end of the process it is expected  that the private sector would become the dominant 
driving force for economic growth and development, while the role of government would largely be 
reduced to that of a facilitator.  
78. The third pillar, changing the way government  does its work, will yield beneficial results 
including cutting down on waste, maintaining the rule of law, ensuring security, economic stability 
and good relations with foreign partners.  
79. Active participation at multilateral, regional, s ub-regional and bilateral trade negotiations will 
continue. Nigeria’s active participation in the ongoing "Doha Development Agenda" will be 
strengthened. The actualisation of NEPAD's object ives, the economic integration of ECOWAS and 
evolution of a common currency for the sub-region is a cardinal policy. All these are expected to 
create a large economic space needed fo r the prosperity of private businesses. 
80. The financial and banking reforms are focused  on achieving a sound financial foundation for 
the economy. First, the shift from annual monetary policy circular, to a two-year medium-term policy 
framework since 2002/2003 is aimed at providin g a more stable framework for monetary and 
financial policy implementation in order to minimi se over-reaction due to temporary shocks. This will 
bring about a measure of stability and predictability  to both government and private business planners. 
The banking sector reforms whereby bank capitalisation will increase from N2.0 billion to 
N25.0 billion will achieve the much needed strengt h and stability in the ba nking sector, and enhance 
its ability to fully meet the needs of the private sector in a developing economy. 
81. The reforms at the ports are geared towards promoting stability and efficiency with the 
resultant beneficial results to the economy. Th e enactment of the Coastal and Inland Shipping 
(Cabotage) Act of 2003 is meant, among others, to  create more opportunities, empower Nigerians and 
promote value creation in a co-ordinated and conso lidated framework that is consistent with the 
objectives of NEEDS. Further operational improvement s for effective supervision and surveillance, 
including the establishment of Vessel Traffic Management (VETMA) would enhance the benefits of the new policy. 
82. As regards customs operations, reform measures will continue to be introduced to further 
sanitise the Service. The immediate benefits of  the comprehensive examination policy include 
enhanced revenue; correct quality and quantity of  imports; 48-hour port clearance; and enhanced 
competitiveness of domestic manufactures. 
83. The political and civil service reforms remain a top priority of Government.  A new service 
delivery culture through SERVICOM has produced  some beneficial results in some public 
establishments like the Corporate Affairs Commiss ion (CAC), NAFDAC, NIPOST, and the Passport 
Office. As at the end of September 2004, the Du e Process procedures had saved over N118.0 billion, Nigeria WT/TPR/G/147 
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which resulted from enhanced screening of governme nt procurement contracts. The ICPC and EFCC 
have successfully prosecuted many cases of fra udulent practices and money laundering; and the 
Federal Government has successfully retrieved some of the country’s money illegally siphoned away 
to foreign banks. 
84. The President recently inaugurated an 18-mem ber Committee to facilitate the implementation 
of reforms in the nation’s civil ser vice, in line with the proposed refo rms in NEEDS.  The scope of the 
Committee's assignment includes the review of recruitment/appointments, development, deployment, discipline, performance management and incen tives as well as voluntary exit incentives.  The 
Committee is to also incorporate into the propo sed revised Public Service Rules and Financial 
Regulations, other relevant rules and procedures that  will ensure strict observance of transparency, 
justice, equity and accountability in government business. 
85. A National Political Reforms Conference, (N PRC) has also been establishment by 
Government to bring together Nigerians from all segments of the societ y to discuss fundamental 
constitutional issues regarding nationhood. The outcome of the dialogue would ultimately be 
incorporated into the ongoing of constitution review  process, with a view to among others, achieving 
national unity, peace and progress. 
 
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