The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala has stated that the Federal Government of Nigeria’s trade costs are too high to attract foreign investment.
The former Nigerian finance minister disclosed that the cost was equivalent to 306% tariff, one and half times higher than the cost in high-income countries.
She made the declaration via a video link on the second day of the Mid-term Ministerial Performance Review at the presidential villa, Abuja, with President Muhammadu Buhari, ministers and other top government officials in attendance, where she stressed on the need to improve security to attract foreign and domestic investments.
According to her, 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.
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The former Nigeria’s minister of finance and coordinating minister of the economy 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.
According to Okonjo-Iweala: ‘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 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 regional value chain.
‘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 WTO boss said.
AFRICA DAILY NEWS, NEW YORK
