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Nigeria’s trade costs high for investors ― Okonjo-Iweala

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DIRECTOR-General, World Trade Organisation (WTO), Ngozi Okonjo-Iweala, says Nigeria’s trade cost is too high and needs to be cut down to facilitate local and international investment.

  Dr Okonjo-Iweala, who was a former Minister of Finance and Coordinating Minister of Economy under the administration of former President Goodluck Jonathan stated this via a video link on the second day of the Mid-term Ministerial Performance Review at the presidential villa, Abuja.

  In June, the former Finance Minister said trade costs could be managed through channels like the African Continental Free Trade Area (AfCFTA), improving internet infrastructure to boost e-commerce, implementing regulatory reforms, and developing infrastructure in ports and roads.

  “Improving security and lowering transactions for foreign and domestic investments would be necessary,” she said.

  “Nigeria is part of a group of countries negotiating an agreement on investment facilitation at the WTO. Once this agreement is negotiated, gratified and implemented, it could be instrumental in attracting additional trade-oriented investment.

  “To complete investment facilitation, Nigeria has to cut down on trade costs. Infrastructural costs, linkage costs, regulatory costs, customs costs, basically all costs associated with moving goods from the factory or farm gate to the final consumer. Nigeria’s trade costs are too high.”

  The WTO DG 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.

  She pointed out that Nigeria’s trade cost was equivalent to 306 per cent tariff, one and half times higher than the cost in high-income countries.

  According to her, 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.

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