2017 Nigerian Annual Trade Policy Report
The maiden Nigerian Annual Trade Policy Report has been published by the Nigerian Office for Trade Negotiations (NOTN).
This report is one of several steps to implement the firm determination of the Federal Government of Nigeria (FGN) to diversify the economy and, ensure that trade and companion investment and digital economy policies, function more effectively as drivers of the Nigerian economy. Contained in this Report are trade statistics that will be used to monitor, assess and re-negotiate Nigeria’s trading relationship with counterparts. These statistics shall be updated quarterly.
The launch of this report comes at a strategic moment and shows calculable progress and identify exciting opportunities in the economy for business. The longstanding challenges in the Nigerian economy are being addressed. In Q2 of 2017, Nigeria exited 5 successive quarters of economic recession. Recovery and growth are now underway. Exit from the recession was a response to a range of systemic domestic reforms that are being implemented.
The Economic Management Team (EMT) of Nigeria meets regularly to ensure coherence across trade (structural), fiscal and monetary policies. Strategically, the priority of economic policy is for structural transformation to diversify and modernize the economy, accelerate growth, enhance economic welfare and increase job opportunities for Nigerians. These reforms are geared to improve efficiency, productivity and competitiveness of the Nigerian economy.
Patience is required for the positive yields from corrective reforms to serious and longstanding economic and trade policy anomalies. Despite the effects of policy lag, the good news is that economy is responding positively. From a post-recession growth rate of 1.5% in 2017, the economy is estimated to grow at 2.5% and better in 2018. Inflation is on a downward trend. In the 2017 World Bank Report on the Ease of Doing Business ranking, the economy was moved up 24 places. Nigeria was ranked amongst the Top 10 Reformers in the global economy. Positive FDI flow has improved and confidence has returned to the business community.
Trade policy and accompanying negotiations are key to sustaining the economic upturn, recovery and growth. These are areas where the FGN has taken significant steps forward. The Government has re-organized and revamped Nigerian Trade Policy. Using trade policy and negotiations, Nigeria is taking concrete steps not only to maximize its trade and economic potential, but also to correct and re-balance longstanding economic anomalies in Nigeria’s trading relationships. The goal is to update and modernize and also, to forge stronger bilateral, regional, continental and global trade relationships. A major step forward to actualize these objectives was the decision by the Federal Executive Council to establish the Nigerian Office for Trade Negotiations (NOTN) in May 2017.
In accordance with the mandate from the Government, the NOTN will lead all of Nigeria’s trade negotiations and, in coordination, with the Nigerian Investment Promotion Commission (NIPC), unify Nigeria’s trade and investment negotiating policy framework. In unifying trade and investment negotiations, the objective would be to create value chains that connect regionally and globally, bolted into Nigerian producers of goods, service providers and industry.
To this end, a key objective is growing the domestic market and also connecting it, profitably, to regional, continental and global markets. Critically, the NOTN has been mandated to establish rules-based safeguards to protect the Nigerian economy from unfair and injurious practices from trading partners. This process is underway. The greater the exposure, the greater the risks for which rules-based safeguards should be emplaced. In using trade, investment and technology as engines for growth, Nigeria shall remain committed to international cooperation, regionally, continentally and multilaterally.
As we sustain Nigeria’s leadership, multilaterally, at the WTO, the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (AfCFTA), on the threshold of establishment, shall be at the center of Nigeria’s economic operations. The foundation of Nigeria’s welfare and prosperity are inextricably connected to ECOWAS and the AfCFTA. As stated by President Buhari, at the 30th Assembly of African Union (AU) Heads of State and Government in Addis Ababa, Ethiopia, on 28th January, this year: In a rapidly changing global economy, with much uncertainty we believe that the establishment of a Continental Free Trade Area would provide Africa with tremendous opportunity to achieve significant growth driven by intra-Africa trade.
As the Number One economy in Africa, Nigeria is acutely aware of its obligation for leadership. We shall do what is required to grow the Nigerian economy and contribute to mutually profitable business relationships, and prosperity in a rules-based global economy. In doing so, we shall employ trade, investment, technology and the abundant intellectual property of creative Nigerians to grow the economy and enhance welfare. This report is an invitation to Nigeria’s trading partners and businesses to join hands with the Government in the reconstruction, modernization and growth of the Nigerian economy. I am sure that readers of this report will find elements for engagement in the Nigerian economy. The trade statistics illuminate the opportunities for engagement, re-balancing and expansion of Nigeria’s trading relationships. Most importantly, I recommend this report to all readers and subscribers as the reference point on Nigeria trade policy
Federal Republic of Nigeria
Prospects for the year ahead (2018)
2017 was the first and start-up year for the NOTN. The foundation of the office was set, both in hard infrastructure and office culture. There is a commitment to world class top performance, in negotiations and improved domestic coordination for trade policy and associated areas of policy.
In 2017, Nigeria led the negotiations as Chairperson at all levels of the African Union (AU) to establish the AfCFTA. The establishment of the AfCFTA, expected to adopted and approved African Union Summit of Heads of States and Government in March 2018. The emergence of the AfCFTA will be historic and unprecedented. The CFTA will be the biggest Trade Area Agreement since the 1995 WTO Agreement by number of countries. In the year to come, there shall be a Nigeria-wide Sensitization Workshop on the AfCFTA Agreement and given particular attention to sensitizing Nigerian businesses and corporations to take advantage of the new opportunities and market access that the CFTA will herald.
In the year under review, the NOTN deepened national consultations on trade policy. The preparations for the Eleventh WTO Ministerial Conference in Buenos was thorough and across all areas of trade policy. Negotiated trade benefits will not by themselves deliver any economic growth benefit to Nigeria, except they are used and the opportunities maximized by Nigerian businesses and individuals.
In 2017, in ECOWAS, the NOTN engaged across a number of areas to underscore Nigeria’s commitment to deepen regional integration from the angles of Industry, Trade and Investment. Nigeria’s welfare and prosperity are interlinked with the prosperity of ECOWAS. To follow-up, in 2018, the NOTN will focus on engaging with other Member States to drive much-needed reforms needed to deliver on the economic integration agenda of ECOWAS based on the sovereign dynamics of ECOWAS Member States.
Considerable devotion will also be paid to preparing the ECOWAS sub-region for the implications of the AfCFTA and for maximizing the benefits while safeguarding economies in the sub-region from unfair and injurious trade practices by partners from outside the region. One of the priorities that shall be pursued shall be be the establishment of an ECOWAS Trade Policy Committee (ECOWAS TPC), consisting of designated Chief Negotiators of ECOWAS Members, and which shall recommend mandates, priorities and positions to ECOWAS principals. These Chief Trade Negotiators shall have expertise and profound understanding of trade policy and the relationship for structural reforms for productivity and competitiveness.
Given Brexit, the Commonwealth Heads of Government (CHOGM), and its 25th Session (CHOGM-25) should provide new variables for deepening intra-Commonwealth trade and investment flows. The NOTN is participating actively in the preparatory activities for the CHOGM-25, scheduled to hold in London in April, 2018. The NOTN chairs the Ministry of Foreign Affairs Sub-Committee on “Trade and Business”, preparatory for CHOGM.
In 2017, the NOTN mobilized other Nigerian MDAs around the unique effort to organize the “High-Level Policy and Private Sector Forum on Trade and Investment Facilitation for Development”, in Abuja, from 2nd to 3rd November, 2017. The resulting, “Abuja Statement: Deepening Africa’s Integration in the Global Economy through Trade and Investment Facilitation for Development” has now become a multilateral reference point on Investment Facilitation for Development. In 2018, Nigeria will build on those efforts, continue to push for trade and investment facilitation for growth, development and job creation. The purpose will be geared to multiplying the gains of the multilateral trading order for Nigeria and ensuring improvements in the development dimension of the rules-based multilateral trading system.
2018 will be an even more important year for Nigeria’s trade policy leadership. The NOTN shall improve its focus by implementing action to design relationships in updated strategic alliances, and its role in the multilateral trading system. The goals and priorities of Nigeria’s trade relationships shall be to dynamically scale up action to use trade, investment and associated areas to accelerate growth, modernize and diversify the economy and expand employment opportunities for approximately 2 million Nigerians entering the labour market, annually.
In 2018, Nigeria will negotiate strategic relations with notable trading partners using agreed 21st century templates for Nigeria’s Trade Agreements. On the flanks of the MC11 in Buenos Aires, Argentina, in 2017, Honourable Minister Dr. Okechukwu Enelamah, signed, on behalf of Nigeria, the Joint Declaration on Cooperation (JDC) with the European Free Trade Association (EFTA). This was a concrete milestone. It signaled the types of agreements Nigeria intends to sign onto, going forward. These would be agreements offering mutual benefits and responsibilities, based on the establishment of global value chains.
The establishment of a rules-based trade remedy infrastructure shall be a priority in 2018. With the support of King and Spalding, signaled by the signing of an agreement with the NOTN, the pace of establishment of a trade remedy infrastructure shall be accelerated. Injurious and unfair trade practices targeted at the Nigerian market are posing ever greater risks, undermining industrialization of the Nigerian economy and posing a serious handicap to development. The current pre-occupation is with the drafting of legislation, staff requirement for an investigating authority and, training.
The establishment of the database for all of Nigeria’s Trade Agreements since independence, shall be completed. Competent use shall be made of Nigeria’s Trade Statistics, which shall be updated, quarterly. These trade statistics shall be prepared and updated in coordination with the National Bureau of Status (NBS). The parameters for these statistics shall be systemically institutionalized.
The key NOTN currently functions, pursuant to the Executive Act of the Federal Executive Council. Another priority in 2018, will be engagement with the Nigerian National Assembly to enact the NOTN law, in accordance with the FEC decision of 10th May, 2017.
Training of NOTN staff and cooperation with key MDAs shall remain a key priority and will scaled-up in 2018. Training shall cover all areas of trade policy: trade in goods, services, investment, intellectual property, competition, negotiations, legal drafing and economic and trade policy analysis. NOTN staff shall be sent for training to centers of economic and trade policy excellence, in the global economy. All of Nigeria’s neighbours are francophone. In 2018, the NOTN shall add bilingual capacity. As part of its capacity building efforts to bridge the skill gaps, the NOTN Memoranda (MOUs) are being negotiated and concluded with leading international universities, including the African Law Association of the Harvard University, for students to undertake attachments at the NOTN.
In 2018, Nigeria’s trade policy shall be updated to reflect the tectonic global shifts in the economic and trade policy landscape, including the AfCFTA and the on-going changes in the center of economic and trade gravity in the global economy.
The NOTN remains committed to fostering international and regional cooperation that can facilitate trade and investment, and deliver jobs, economic growth, wealth creation and modernization of the Nigerian Economy. The 2018 Nigerian Annual Trade Policy Report (NATPOR) will give an account of the NOTN’s stewardship in 2018.