WTO completes sixth review of the trade policies and practices of Nigeria

By Danilo Desiderio

All members of the World Trade Organization (WTO), including countries and customs territories, undergo periodic reviews of their trade policies. The frequency of these reviews depends on each member’s share in global trade in goods and services.

Reviews are based on two key documents: a report independently prepared by the WTO Secretariat and a policy statement submitted by the member under review.

Economic Overview

Nigeria has achieved a degree of economic diversification compared to other African nations. However, its economic growth remains heavily reliant on the oil and gas sector, which contributed 5.7 percent of gross domestic product (GDP), 90 percent of export value, and 45 percent of government revenue in 2023.

While the agriculture sector saw modest growth, accounting for 23.2 percent of GDP in 2023 (up from 21.1 percent in 2017) and employing approximately 38 percent of the workforce, Nigeria remains a net importer of agricultural products. In response, the government has requested inclusion in the WTO’s list of net food-importing developing countries.

Other sectors, such as the creative industries, are gaining international recognition. Nigeria’s film industry, Nollywood, produced over 2,500 titles in 2023, many of which are featured on global streaming platforms. The informal economy also plays a significant role, contributing an estimated 41 percent – 65 percent of GDP.

Trade Environment Challenges

The WTO’s trade policy review highlights several persistent challenges in Nigeria’s trading environment. Import procedures remain lengthy, with 90 percent of consignments subject to physical inspection and an additional 9 percent scanned in 2023.

The use of risk-based analysis is minimal, and export procedures are similarly burdensome.

Nigeria applies the ECOWAS (Economic Community of West African States) Common External Tariff (CET) but with deviations, such as Import Adjustment Taxes (IATs), which affected nearly 200 tariff lines in 2023, up from 97 in 2017. These deviations impacted 8.7 percent of imports by value.

Tariff rates are frequently revised, with discretionary exemptions and annual fiscal policy measures introducing changes to IATs, duty rebates, and import prohibitions. A list of restricted items – covering 25 categories or roughly 5 percent of tariff lines – requires non-automatic licenses for importation through a manual process.

In 2023, imports of restricted goods accounted for 6 percent – 7 percent of total imports.

Frequent border closures, unpredictable trade policies, and high external trade costs – due to transport inefficiencies, port congestion, currency measures, and regulatory complexity – further exacerbate trade challenges. These costs are 50 percent – 75 percent higher than those in major global economies.

Regional Integration Efforts

These challenges hinder Nigeria’s efforts to enhance economic integration within regional and continental markets, particularly under the African Continental Free Trade Area (AfCFTA). As one of Africa’s largest economies, Nigeria is uniquely positioned to lead regional integration efforts.

Addressing these barriers is critical to fulfilling its potential as a driver of continental economic growth.

Danilo Desiderio serves as the CEO of Desiderio Consultants Ltd in Nairobi, Kenya, specializing in African customs, trade, and transport policies. He is a customs and trade expert at the World Bank and a senior associate to the Horn Economic and Social Policy Institute (HESPI).