The Director-General of the World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala, on Tuesday, told President Muhammadu Buhari, ministers and other top government officials that Nigeria’s trade costs are too high.
Speaking to them via a video link on the second day of the Mid-term Ministerial Performance Review at the presidential villa, Abuja, she also spoke of the need to improve security to attract foreign and domestic investments.
She said the country must cut down not only on trade cost but also infrastructure cost, linkage cost, regulatory cost, customs cost, and all costs associated with moving goods from the factory to the final consumer to complement investment facilitation.
Former Nigeria’s minister of finance and coordinating minister of the economy pointed out that Nigeria’s trade cost was equivalent to 306 per cent tariff, one and half times are higher than the cost in high-income countries.
The WTO boss noted that congestion, capacity constraints and high costs at Nigerian ports do not encourage investment as they make it difficult to build supply chain operations in the country.
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.
“To complement investment facilitation, Nigeria has to cut down on trade cost, infrastructure cost, linkage cost, regulatory cost, customs cost, basically, all costs associated with moving goods from tie factory or farm gate to the final consumer.
“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 per cent tariff and for Nigeria, it’s even slightly higher at 306%.