Nigeria WT/TPR/S/247

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II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES

(1) TRADE POLICY FORMULATION AND IMPLEMENTATION

1. The Federal Ministry of Commerce and Industry has the main responsibility for making and
implementing trade policy. Other ministries and agencies also have primary or shared responsibility
for trade in some products, such as the Ministry of Energy, which is responsible for trade policy for
hydrocarbons. The Central Bank of Nigeria, the Ministry of Finance and the Ministry of Transport
also have are role in trade policy development.

2. The National Planning Commission (NPC) advises the Government on development and
economic management. The NPC was set up by Decree No. 12 in 1992, as amended by the National
Planning Commission Act, 1993. The Trade Policy Advisory Council (TPAC) has overall
responsibility for coordinating trade policy among the responsible ministries. The TPAC is made up
of representatives from the Federal Ministries of Foreign Affairs, Commerce and Industry,
Agriculture and Water Resources; and Information and Communications. The Economic Policy Co-
ordination Committee monitors macro-economic developments, including trade. The EPCC is made
up of senior officials from the Office of the Secretary of the President, the Office of the Secretary to
the Government of the Federation and the Ministries of Finance, Commerce and Industry; and
Agriculture and Water Resources. In 1995, the Ministry of Commerce and Industry established a
National Focal Point to coordinate the implementation of the commitments resulting from the
conclusion of the Uruguay Round. The focal point was renamed the Enhanced National Focal Point
in 2001, and includes representatives from the private sector, civil society, and academia.

3. Input to trade policy making is also provided by government agencies, including: Nigeria
Customs Service, Nigeria Ports Authority, Nigeria Export Promotion Council, Nigeria Export and
Import Bank, Nigerian Export Processing Zone Authority, Nigeria Investment Promotion
Commission, Nigeria Tourism Development Corporation, Bureau of Public Enterprises, Nigerian
National Petroleum Corporation, National Agency for Food and Drug Administration and Control,
and the Standard Organization of Nigeria.

4. The organised private sector (OPS) is involved in policy making through representative
organizations that participate in the National Focal Point and other official bodies, including the
Nigerian Export Promotion Council (NEPC), Nigerian Export-Import Bank (NEXIM), Nigeria Export
Processing Zones Authority (NEPZA), States' Export Promotion Committees, Nigeria Committee on
Trade Procedures (NITPRO), and the Presidential Committee on Export-oriented companies. The
main organizations representing the private sector are:

- the Manufacturers Association of Nigeria, which represents nearly 2,000 enterprises

in both the public and private sectors1;

- the National Association of Chambers of Commerce, Industry, Mines and Agriculture

(NACCIMA), which is the umbrella organization for the city, state, and bilateral
chambers of commerce in Nigeria. The Association runs a Trade and Investment
Promotion Centre to facilitate investment in Nigeria2;

- the Association of Nigerian Exporters (ANE), membership of which is mandatory for

all exporters3; and

1
Viewed at: [Link]
2
Viewed at: [Link]
3
Viewed at: [Link]
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- several other organizations, such as the Nigerian Association of Small-Scale

Industrialists (NASSI), banking institutions, organized labour, and professional
institutions.

5. Some development partners have noted that steps are also being taken to include stakeholders
in the development of legislation: the preparation of the draft Nigeria Customs Service Act included
consultations with the private sector (Table II.1). However, as noted in the previous Trade Policy
Review Report, few organizations represent consumers or rural dwellers. Furthermore, some official
agencies could improve their consultative processes, improve access to information, and enhance
trade policy development capacity.4
Table II.1
Selected trade and trade-related legislation, December 2010
Area Title of law/regulation
Customs Customs and Excise Management Act, Cap 45, LFN, 2004
Customs and Excise Management (Amendment) Act, No. 20, 2003
Customs and Excise Management Act, Cap 84, 1959
Customs and Excise (Special Panel and other Provisions) Cap 45, LFN, 2004
Customs and Excise Agents (Licensing) Regulations 1968 (Legal Notice 95/1968) as amended
Decree No. 45, 1992 as amended by Decree No. 77, 1993
Contingency measures Customs Duties (Dumped and Subsidized Goods) Act, Cap 87, 1958
Import prohibitions Endangered Species (Control of International Trade and Traffic) Act, Cap 108, LFN, 1990
Export promotion and assistance Export Incentives (Miscellaneous Provisions) Act, Cap 118, LFN, 1990
Nigerian Export Credit Guarantee and Insurance Corporation Act, Cap 305, LFN, 1990
Nigerian Export Promotion Council Act, Cap 306, LFN, 1990 as amended by Act No. 64 of
1992
Nigeria Export-Import Bank Act No. 38, 1991
Nigeria Export Processing Zones Act No. 63, 1992
Export of Nigerian Produce Act, Cap 119, LFN, 1990
Export Produce (Federal Powers) Act, Cap 120, LFN, 1990
Oil and Gas Export Free Zone Act No. 8, 1996
Export prohibition Export (Prohibition) Act, cap 121, LFN, 1990
Intellectual property Trade Marks Act, Cap 436, LFN, 1990
Industrial Inspectorate Act, Cap 180 LFN, 1990
Patents and Designs Act, Cap 344, LFN 1990
Copyright Act, Cap 68, LFN, 1990 as amended by the Copyright (Amendment) Decree No. 98,
1992 and the Copyright (Amendment) Decree No. 42 of 1999
National Office of Industrial Property Act, Cap 268, LFN, 1990, as amended by Act No. 82,
1992
Standards and technical regulations Standards Organization of Nigeria Act, Cap 412, 1990, as amended by Act No. 18, 1990
Price controls Productivity, Prices and Income Board Act, Cap 372, LFN, 1990
Petroleum Act, Cap 350, LFN, 1990
Table II.1 (cont'd)

4
WTO document WT/TPR/S/147, 13 April 2005.
Nigeria WT/TPR/S/247
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Area Title of law/regulation

Taxation Petroleum Profits Tax Act, Cap P13, LFN 2004
Personal income Tax Act, Cap P8, LFN 2004
Companies Income Tax Act, Cap C21, LFN 2004, amended in 2007
Value Added Tax Act, Cap VI, LFN 2004 amended in 2007
Industrial Development (Income Tax Relief) Act, Cap 17, LFN 2004
Stamp Duties Act, Cap s8, LFN 2004
Capital Gains Tax Act, Cap C1, LFN 2004
Taxes and Levies (Approved list for collection) Act, Cap T2, LFN 2004
Education Tax Act, Cap E4, LFN 2004
Business and investment Companies and Allied Matters Act No. 1, 1990
Labour Act, Cap 198, LFN, 1990
Bankruptcy Act, Cap 30, LFN, 1990, as amended by Act No. 109, 1992
Industrial Promotion Act, Cap 181, LFN, 1990
Investment and Securities Act No. 45, 1999
Investments and Securities Decree No. 34, 1999
Nigerian Investment Promotion Commission Act No. 16, 1995 as amended by Act No. 32, 1998
Public Enterprises (Privatization and Commercialization) Act, No. 28, 1990
Others Trade Disputes Act, Cap 432, LFN, 1990
Trade Disputes Essential Services Act, Cap 433, LFN, 1990
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No. 17, 1995
Money Laundering (Prohibition) Act, No. 7, 2003
National Shipping Policy Act, Cap 279, LFN, 1990
Nigerian Shippers' Council (Freight Stabilization Fees on Imports and Exports) Regulations
Nigeria Shippers' Council (Local Shipping Charges on Imports and Exports) Regulations, S.I.
7, 1997
Coastal and Inland Shipping (Cabotage) Act, No. 5, 2003
External Trade Letters of Credit (Control) Act, Cap 124, LFN, 1990
Consumer Protection Act, No. 66, 1992
Trade Malpractices (Miscellaneous Offences) Act No. 67, 1992

Source: Nigerian authorities; and various online sources.

(2) TRADE POLICY OBJECTIVES

6. Nigeria's plans for economic and social development are set out in Vision 20:2020, which
followed the National Economic Empowerment and Development Strategy (NEEDS) medium-term
plan that covered the period 2003-07 (Chapter V). Vision 20:2020 sets out the overall objective of
making Nigeria one of the top 20 economies in the world by 2020, reducing poverty, improving
wealth distribution, and a number of other social and economic development objectives. According to
Vision 20:2020, the objective of becoming a top 20 economy requires industrialization based on
agriculture, non-oil minerals, and manufacturing, and diversification away from oil dependence. As
noted in Chapter I, achieving these goals would require economic growth to average more than 14%
per year in the 2011 to 2020 period but, just maintaining current growth rates requires a broad range
of economic, structural, administrative, legal, and institutional reforms along with investment in
infrastructure. With only nine years left to 2020, these reforms and investments would have to take
place very soon.5

7. The economic policies outlined in Vision 20:2020 would continue the course of action
pursued over the past ten years by continuing to liberalize trade and industry with growth driven by

5
For the full text of Vision 20:2020, see the National Planning Commission online information.
Viewed at: [Link] [January 2011].
WT/TPR/S/247 Trade Policy Review
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the private sector. According to the document, market protection is not proscribed but is to be used
only for limited periods and for selected industries. The plan states that Nigeria is to continue trade-
enhancing reforms and to stimulate value-added exports in order to diversify away from crude oil
exports and to higher value-added processed and manufactured goods.

8. In order to support the development of the manufacturing and processing sectors, a number of
major reforms for primary production have been put forward. Many are intended to improve the legal
framework and the institutional support for the different sectors. For example:

- agriculture: Vision 20:2020 states that the Land Use Act, 1978 is to be amended to
improve conditions of tenure and allow the development of larger scale farming.
Improved tenure would also enable farmers to obtain better access to credit as their
land could provide collateral for loans. It also states that fertilizer production and
distribution would be fully deregulated and that the State would improve irrigation
and extension services to farmers.

- minerals and metals: Vision 20:2020 foresees a big increase in production, with
initial Government investment in steel production before privatization. It also
provides for support to the sector through a geological survey of the entire country
and improvements in funding for supporting agencies such as the School of Mines,
the Council of Mining Engineers and Geoscientists, and the National Metallurgical
Development Centre.

- oil and gas: the objective is to increase production and reserves while improving
value added through refining of crude oil. While stating that fiscal incentives for
exploration are to be improved, Vision 20:2020 also says that local content should be
increased and the Petroleum Industry Bill passed into law.

9. The main engine for growth and the focus on increasing exports is in the manufacturing and
processing sectors. The plan envisages the creation of different types of industrial zones focussed on
manufacturing, from six large industrial parks each located in a different region of the country, to
smaller industrial clusters operated with state and local government support, enterprise zones to
encourage the informal sector to integrate with the formal economy, and incubators to provide for the
establishment of new enterprises. Businesses establishing in these zones would benefit from the
infrastructure provided and fiscal incentives such as exemptions from import duties or VAT on inputs
and low interest rates on loans.

10. To encourage exports, Vision 20:2020 proposes strengthening the capitalization of financial
institutions like the Bank of Industry, the Nigerian Export Import Bank, and the Nigerian Agricultural
Cooperative and Rural Development Bank. Border administration is also to be improved with new
legislation on customs procedures, and the privatization of the ports has already helped reduce the
time needed to import and exports goods. Simplifying the tariff book, with the implementation of the
ECOWAS common external tariff, and removing products from the list of prohibited goods, would
also help to improve trading conditions (Chapter III).

(3) INVESTMENT REGIME

11. Nigeria's policies for economic growth put strong emphasis on foreign direct investment,
particularly for infrastructure and large-scale industrial projects. The authorities recognize that
improving the climate for investment requires both creating a legal framework that encourages it and
removing institutional and practical barriers, including tackling corruption, social and economic
instability, and applying the rule of law. During the 1990s, significant steps were made to improve
Nigeria WT/TPR/S/247
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the legal framework through the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act,
1995, which created an autonomous foreign exchange market and removed barriers to the repatriation
of foreign currency, and the Nigerian Investment Promotion Commission (NIPC) Act, 1995, which
established the NIPC. The NIPC is a federal agency created to provide supporting services to setting
up a business in Nigeria and to assist investment in Nigeria by existing and new businesses
(Table II.2).6
Table II.2
Taxes and investment incentives
Sector Description
All sectors Taxes:
(i) 30% companies income tax in all sectors, except companies in the preferred sectors (agriculture,
mining of solid minerals, and wholly export) where it is 20% for the first 5 years, and petroleum;
(ii) tax holiday on companies investing in pioneer industries for 3 years, renewable for an additional 2
years;
(iii) tax relief current spending on research and development is restricted to 10% of total profit;
(iv) rural Investment Allowance for companies located more than 20 km from infrastructure provided by
the Government in the year in which the investment occurred at:
a. 100% of the cost of infrastructure where no facilities are provided,
b. 50% of the cost of infrastructure where no electricity is provided,
c. 30% of the cost of infrastructure where no water is provided, and
d. 5% of the cost of infrastructure where no tarred road is provided;
(ii) capital allowances from 10% to 95% depending on expenditure.
Investment incentives:
(i) unconditional transferability of funds through an authorized dealer in freely convertible currency;
(ii) no enterprise shall be nationalized or expropriated by any government of the federation, unless the
acquisition is in the national interest or for public purpose, in which case there are legal procedures to
follow;
(iii) any company incorporated in Nigeria is allowed to have access to land rights for the purpose of its
activity in any state in the country.
Industrial sector (i) companies with Pioneer Status are entitled to a tax holiday for 3 years, which may be extended by a
further 2 years;
(ii) manufacturing companies with turnover of less than N1 million are taxed at 20% for the first 5 years of
operation.
Oil and gas (i) tax rate under the Petroleum Profit Tax (PPT) Act:
a. 85% for mature sole risk or joint-venture partners, marginal field operators, and service contracts
that have fully recovered their capital investment,
b. 65% for newer sole risk or joint-venture partners, marginal field operators, and service contracts
that have not fully recovered their capital investment,
c. 50% for profit sharing contracts,
d. 30% for gas production, transmission and distribution;
(ii) capital allowance at the rate of 20% per annum in the first 4 years, 19% in the 5 th year and the
remaining 1% in the books;
(iii) investment tax credit at 50% for production sharing contracts;
(iv) petroleum investment allowance at varying rates from 5% to 20% depending on water depth;
(v) repatriation of profits;
(vi) no foreign exchange regulation;
(vii) dividend derived from manufacturing companies in petro-chemical and liquefied natural gas
subsector exempt from tax.
Agriculture (i) 100% capital allowances;
(ii) capital allowances on agri-allied plant and equipment are 95% with 5% retained.
Solid minerals (i) three to five-year tax holiday;
(ii) possible capitalization of expenditure on exploration and surveys;
(iii) provision of 100% foreign ownership of mining companies or concerns;
(iv) capital allowance.
Table II.2 (cont'd)

6
WTO (2005).
WT/TPR/S/247 Trade Policy Review
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Sector Description
Tourism (i) tax holidays;
(ii) longer moratorium and import duty exemption on tourism-related equipment;
(iii) tax exemption on 25% of incomes derived from tourists by hotels.
Telecommunications (i) pioneer status.
Gas exploitation (i) investment needed to separate oil from gas to be considered part of oil field development cost;
(ii) capital investments to deliver gas to point-of-use or point-of-transfer to be treated as capital investment
for oil development.
Gas utilization (i) tax-free period of 3 years; or an additional investment allowance of 35%;
(ii) accelerated capital allowances after the tax free period of 95% with 5% retained on the books;
(iii) 15% investment capital allowance;
(iv) gas development projects taxed under the CITA (not the PPT);
(v) 0% royalty.
Exporting (i) company profits in respect of goods exported are exempt from tax provided: the proceeds are
repatriated to Nigeria and used exclusively for the purchase of raw materials, plant, equipment, and
spare parts; and the company is established in an export processing zone;
(ii) profits of companies whose supplies are exclusively input to the manufacture of products for export are
excluded from tax;
(iii) investment tax credits at 15% where a company replaces obsolete plant and machinery or 25% for
companies engaged in fabrication of spare parts for export and local consumption;
(iv) retention of export proceeds in a foreign currency in a domiciliary account with a Nigerian bank;
(v) export development fund to cover expenses on export promotion activities;
(vi) export adjustment fund to compensate exporters for high cost of local production, arising mainly from
infrastructural deficiencies;
(vii) unrestricted remittance of profits and dividends; and
(viii) zero-rated VAT.

Source: Nigerian authorities.

12. In March 2006, the President opened the One Stop Investment Centre (OSIC) in the NIPC.
The OSIC brings together the agencies responsible for the processes, procedures, and requirements for
business entry permits, licences, and authorizations. The Centre aims to reduce the cost of a business
entering and establishing in Nigeria by simplifying procedures and speeding up the processing of
application forms.7

13. There are no barriers to foreign entities establishing a business or investing in Nigeria.
However, the process is complicated, requiring the local incorporation of public and private
companies through the Corporate Affairs Commission, and fees of N10,000 per N1 million of
authorized share capital for a private company or N20,000 per N1 million for a public company plus
N15,000 per N1 million in stamp duties. Foreign companies setting up in Nigeria must register with
the NIPC and must have minimum share capital of N10 million. Oil companies, mining companies,
and telecommunications companies must obtain licences from the relevant ministries and banks must
obtain a licence from the Central Bank of Nigeria.

14. Foreign acquisitions of Nigerian businesses are regulated by the Investments and Securities
Act, 1999, which requires authorization from the Securities and Exchange Commission before a
Nigerian businesses can be taken over, while corporate mergers must be approved by the Federal
High Court.

15. Nigeria has bilateral investment treaties with Egypt, Finland, France, Germany, Italy, Korea,
the Netherlands, Romania, South Africa, Spain, Switzerland, Turkey, and the United Kingdom.
Negotiations are currently on-going with Belgium, the Russian Federation, and the United States. 8
7
OSIC online information. Viewed at: [Link]
8
TradeInvest Nigeria online information. Viewed at: [Link]
[Link]; and UNCTAD Investment Instruments Online. Viewed at: [Link] [Link]/templates/
Nigeria WT/TPR/S/247
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16. Nigeria has comprehensive double taxation agreements with Belgium (effective 1991),
Canada (2000), China (2010), France (1992), the Netherlands (1993), Pakistan (1991), Romania
(1994), South Africa (2009), and the United Kingdom (1989). These treaties apply to personal
income, corporate income, capital gains, and petroleum profits. Treaties with the Czech Republic,
Norway, the Philippines, Poland, the Slovak Republic, Korea, and Sweden are at various stages of
finalization and ratification.9 Nigeria is also negotiating agreements with Denmark, the Gambia,
Germany, New Zealand, Sierra Leone, and Switzerland.10

17. Doing business in Nigeria is not easy and the country ranks 137 th out of 183 economies,
particularly for dealing with construction permits and registering property. The ranking for paying
taxes (134), trading across borders (146), dealing with construction permits (167), and registering
property (179) were particularly low. The main problems seem to be the time needed for each
activity: 938 hours are needed to prepare and pay taxes, 39 days to import an average container,
82 days to register a property, and 350 days to deal with a construction permit. 11 In some areas, the
ease of doing business in Nigeria has improved, for example the time needed to register property has
fallen from 274 days in 2005 to 82 days in 2010, but it is clear that much more needs to be done.

18. Nigeria continues to be perceived as highly corrupt. 12 Several steps have been taken to
address this image, including through legislative measures in the Corrupt Practices and other Related
Offences Act, No. 5, 2000, and institutional reform in the Corrupt Practices and Other Related
Offences Commission. In addition, other governments have pursued cases where individuals and
enterprises resident in their countries have been involved in corrupt practices in Nigeria. 13 However,
despite progress, the perception continues that Nigeria remains corrupt; it ranks 134th out of
178 countries.

(4) TRADE AGREEMENTS

(i) World Trade Organization

19. Nigeria is an original member of the WTO having ratified the WTO Agreement on
6 December 1994.14 Under the Constitution of the Federal Republic of Nigeria, a treaty between the
Federation and another country or group of countries has the force of law only to the extent to which
it has been enacted into law by the National Assembly. 15 The Marrakech Agreement Establishing the
WTO has not been incorporated into Nigerian law and, therefore, traders and investors are unable to
invoke WTO provisions in domestic courts.

20. Nigeria has not signed the Agreement on Trade in Civil Aircraft although it is an observer. It
has not signed and is not an observer to the Agreement on Government Procurement. It has not been
involved in any dispute, as complainant, respondent or third party, in the WTO. Nigeria has made a
number of notifications to the WTO (Table II.3) but a large number remain outstanding (Table II.4).

21. Nigeria has been active in the negotiations under the Doha Development Agenda where it is a
member of several different negotiating groups. It is a member of the African Group, the ACP Group,
and the G-90 Group. In the agriculture negotiations it is in the G-20 and the G-33 groups of
[Link]?id=779 [January 2011].
9
Nigerian authorities.
10
EIU (2010a).
11
World Bank (2010).
12
Transparency International (2004).
13
See, for example, Covington JP, Tillipman J, (2007).
14
GATT document Let/1957, 7 December 1994.
15
Article 12.
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developing countries. In the NAMA negotiations it is one of the group of countries to which
Paragraph 6 of the first draft of modalities refers. 16 That is, less than 35% of its non-agricultural
tariff-lines are bound tariffs. In the TRIPS negotiations it is one of the proponents of the
W52 proposal, that is, it sponsored a proposal on geographical indications and disclosure of genetic
resources and traditional knowledge in patent applications.17
Table II.3
Selected notifications to the WTO, March 2005 to January 2011
Description of Most recent Period covered by
WTO Agreement Date
requirement notification notification
Agreement on Agriculture
Article 10 and 18.2 Export subsidy G/AG/N/NGA/11 22/07/2010 2009
G/AG/N/NGA/10 17/07/2010 2008
G/AG/N/NGA/8 28/10/2008 2007
G/AG/N/NGA/6 11/04/2008 2006
G/AG/N/NGA/4 25/10/2006 1998-2005
Article 18.2 Domestic support G/AG/N/NGA/12 22/07/2010 2009
G/AG/N/NGA/9 16/07/2009 2008
G/AG/N/NGA/7 28/10/2008 2007
G/AG/N/NGA/5 11/04/2008 2006
G/AG/N/NGA/3 25/10/2006 1998-2005
Agreement on Subsidies and Countervailing Measures
Article 25 Subsidies G/SCM//N/186/NGA 12/11/2009 2007-2008
G/SCM/N/155/NGA 19/04/2007 up to 2006
Article 32.6 Laws and regulations G/ADP/N/1/NGA/1 11/05/2007 up to 2006
Agreement on the Implementation of Article VI of the GATT
1994 (Anti-Dumping Agreement)
Article 18.5 Laws and regulations G/ADP/N/1/NGA/1 11/05/2007 up to 2006
Agreement on the Implementation of Article VII of the
GATT 1994 (Agreement on Customs Valuation)
Article 22.2 Notification G/VAL/N/1/NGA/1 5/09/2008 one-off
Checklist of issues G/VAL/N/2/NGA/1 3/09/2008 one-off
GATT 1994
Article XVII:4(a) State trading G/STR/N/12/NGA 6/11/2008
enterprises
Agreement on Import Licensing
Article 7.3 Questionnaire on G/LIC/N/3/NGA/6 26/07/2010 2009
import licensing
procedures
G/LIC/N/3/NGA/5 21/07/2009 2008
G/LIC/N/3/NGA/4 19/11/2008 2007
G/LIC/N/3/NGA/3 24/04/2007 2006
Agreement on Technical Barriers to Trade
Annex 3C Notification of G/TBT/CS/N/162 30/01/2006 one-off
acceptance

Source: WTO Secretariat.

16
Confusingly, paragraph 6 is now paragraph 8 of TN/MA/W/103/Rev.3 of 6 December 2008.
17
WTO document TN/C/W/52 of 19 July 2008 and Add.1 (24 July 2008), Add.2 (25 July 2008), and
Add.3 (29 July 2008).
Nigeria WT/TPR/S/247
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Table II.4
Outstanding notifications to the WTO, January 2011
WTO Agreement Description of requirement WTO Agreement Description of requirement
Agreement on Agriculture State Trading Enterprises
Article 10 and 18.2 Export subsidy Article XVII.4 of GATT State trading enterprises
Article 18.2 Domestic support Services
Import Licensing Article III.3 New or changed laws
Article 7.3 Questionnaire on procedures Article VII.4 Recognition measures
Rules of Origin
Article 5.1 Rules of origin and other details
Annex II, para. 4 Preferential rules of origin

Source: WTO Secretariat.

22. In the negotiations on agriculture, Nigeria is seeking improved market access, particularly
into the markets of developed countries, along with reductions in domestic support and the
elimination of export subsidies. As part of the G-33 group of countries it is also seeking flexibility for
its own commitments on market access. In services, Nigeria is looking for better market access, under
mode 4, and has submitted an initial offer. 18 In NAMA it is looking for reductions in tariff escalation
and preserving flexibility while extending the coverage of bound tariffs. During the period under
review, Nigeria has also submitted a proposal on customs cooperation to the core group of developing
countries, and, as a member of the group, has participated in proposals on special and differential
treatment, capacity building, and technical assistance.

(ii) Regional agreements

(a) African Union and African Economic Community

23. Nigeria is a founding member of the African Union, having signed the Abuja Treaty
Establishing the AEC in June 1991, and is an original signatory to the New Partnership for African
Development (NEPAD).

(b) ECOWAS

1. Nigeria has been a member of the Economic Community of West African States (ECOWAS)
since it was created by the Treaty of Lagos in May 1975 with the objective of promoting economic
integration among its member countries.19 The Treaty was revised in 1993 in order to accelerate
economic integration and set as objectives the establishment of a common market and a single
currency. Nigeria is part of the West African Monetary Zone, which intends to introduce a common
currency by 2015.20 The eventual goal for ECOWAS is to combine the future West African Monetary
Zone common currency with the CFA franc.

2. Under the ECOWAS Trade Liberalization Scheme, work on implementing a common

external tariff started in 1990 and it was to have been established by the beginning of 2004. However,
Nigeria has not been able to adopt the existing four band CET with rates set at 0%, 5%, 10%, and
20%, and a fifth band has been introduced at 35%. The new CET covers about 80% of Nigeria's tariff
lines although it continues to apply import prohibitions on several products. 21

18
WTO document TN/S/O/NGA of 3 September 2007.
19
The other members of ECOWAS are Benin, Burkina Faso, Cape Verde, the Gambia, Ghana, Guinea,
Guinea-Bissau, Liberia, Mali, Senegal, Sierra Leone, and Togo.
20
The members of the West African Monetary Zone are the Gambia, Ghana, Guinea, Nigeria, and
Sierre Leone.
21
World Bank (2009b).
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3. Despite the steps taken to integrate trade in West Africa, Nigeria's exports remain
concentrated in relatively few markets; over half of its exports go to the EU and the United States.
Exports to other African countries are increasing, but still represent only 7% of total exports by value,
and most of this share goes to Algeria, Botswana, and South Africa and not to other ECOWAS
members.

(iii) Non-reciprocal and asymmetric preferential arrangements

4. A number of countries provide non-reciprocal preferential treatment for imports from Nigeria,
including: Belarus, Canada, the EU, Japan, New Zealand, the Russian Federation, Switzerland, and
Turkey. The United States also provides preferential access under the African Growth and
Opportunities Act. Nigeria has been part of the Global System of Trade Preferences (GSTP) among
developing countries since its inception in 1988.

5. As part of ECOWAS, Nigeria is in negotiations with the EU on an Economic Partnership

Agreement. At the time of writing, Nigeria negotiations remain ongoing with several outstanding
issues to be resolved. Thus, at present the Cotonou Agreement between the EU and the ACP
countries remains in force. The Cotonou Agreement provides for unilateral preferences by the EU for
most imports from Nigeria.