The Director-General of the World Trade Organisation, Dr Ngozi Okonjo-Iweala, has raised concerns over Nigeria’s trade costs being too high and unattractive for foreign investors.\
The WTO boss expressed her views to the President, Major General Muhammadu Buhari (retd.), ministers and other top government officials on Tuesday at the two-day Mid-term Ministerial performance review retreat organised by the Office of the Secretary to the Government of the Federation at the Presidential Villa, Abuja.
According to her, the costs of doing business in Nigeria were far higher than those of high-income countries, which is not conducive to forming a regional value chain.
She urged the government of Nigeria to cut down its trade and infrastructure costs and suggested a reduction of linkage and regulatory costs as well as Customs duties to encourage investments.
”Nigeria’s trade costs are too high. According to the World Bank-ESCAP trade costs for 2019, trade costs for African countries are on the average equivalent of a 304% tariff, and for Nigeria, it’s even slightly higher at 306%.
“These numbers are one and half times higher than trade cost in high-income countries. Such high costs are not conducive to forming a regional value chain,” the WTO boss noted.
“Congestion, capacity constraints and high costs in our ports make life difficult for anyone seeking to build supply chain operations in Nigeria and hence, expand trade from there.”.
“The government should reduce all costs associated with moving goods from the factory to the final consumer to complement investment facilitation,” she added.
Speaking on security, the WTO boss also urged an improvement of the security situation in the country to attract foreign and domestic investments.
She said, “Improving security and lowering transaction cost for foreign investment, even for domestic investment, would be necessary. And Nigeria is part of a group of countries negotiating an agreement on investment facilitation at the WTO.
”Once this agreement is negotiated, ratified, and is being implemented, it could be instrumental in attracting additional trade-oriented investment.”
According to World Bank’s 2020 Doing Business Report, Nigeria ranks 131 out of 190 countries on the World Bank Doing Business Index, moving up 15 places from 146th position in the 2019 Report. The Report names Nigeria, for the second time, as one of the top 10 countries with the most notable improvements during the review period, with the country improving significantly in “starting a business, dealing with construction permits, getting electricity, registering property, trading across borders and enforcing contracts” indices.